The unexpected widening of the U.S. trade deficit in December keeps the annual gap at historically high levels.

The latest trade data from the United States shows that the trade deficit significantly expanded in December, marking the end of a year characterized by tariff policy fluctuations and intensifying volatility. According to data released by the U.S. Commerce Department on Thursday, the trade deficit in goods and services in December widened to $703 billion, higher than the previous month and well above the median expectation of $555 billion among economists surveyed by the media. For the whole year, the U.S. trade deficit in 2025 accumulated to $901.5 billion, remaining at a high level since records began in 1960. Structurally, the expansion of the trade deficit in December was mainly driven by a surge in imports and a decrease in exports. Imports in the month increased by 3.6% compared to the previous month, while exports of goods and services fell by 1.7%. The increase in imports of computer parts and motor vehicles was particularly notable, while the decrease in exports mainly reflected a reduction in the shipment of gold abroad. Looking back at 2025, the monthly fluctuations in U.S. trade data were significant. Analysts pointed out that this was closely related to President Trump's continued signaling of tariff policies. In the face of potential tariff increases, U.S. importers accelerated their pace of stocking up on goods, especially imports of gold and pharmaceutical products showed drastic fluctuations between different months as businesses attempted to complete purchases before higher tariffs took effect. After adjusting for price factors, the merchandise trade deficit used to measure real GDP expanded to $971 billion in December, the highest level since July of last year. It is worth noting that gold trade is not included in the government's calculation of the Gross Domestic Product (GDP) unless it is used for industrial purposes such as jewelry. The latest trade data will also serve as an important basis for economists to evaluate the performance of the economy in the fourth quarter. Prior to the release of the data, the Atlanta Fed's GDPNow model forecasted that net exports would contribute approximately 0.6 percentage points to economic growth in the fourth quarter, pushing the quarterly GDP growth rate to 3.6%. The U.S. government will officially release fourth quarter GDP data on Friday. The Trump administration has made tariffs one of its core economic policy tools, aiming to reduce reliance on foreign goods, promote domestic investment, and reverse the long-term decline in manufacturing jobs. Trump and his economic team have repeatedly questioned related research conclusions and denied that the costs of tariffs are primarily borne by U.S. consumers and businesses. In terms of specific goods and country structures, the AI-related investment boom is reshaping the U.S. import landscape. Last year, the scale of imports of computers and related accessories by U.S. companies increased by nearly $145 billion compared to 2024, reflecting strong demand for AI infrastructure construction. By country, the U.S. trade deficit with Taiwan expanded to $146.8 billion last year, reaching a record high; while the trade deficit with China significantly narrowed to around $202 billion, the lowest level in over 20 years, reflecting the impact of high tariffs imposed on Chinese goods. At the same time, the trade deficit with Mexico expanded to a record high, while the annual deficit with Canada narrowed slightly. According to data released on the same day, the number of initial jobless claims in the United States saw the largest drop since November last year, showing that the labor market, after experiencing fluctuations, still has some resilience.