The US trade deficit expanded to $603 billion in March, with strong consumer and business demand.

In March, the U.S. trade deficit widened, with the increase in imports exceeding the increase in exports, indicating strong consumer and business demand. Data released by the U.S. Department of Commerce on Tuesday showed that the trade deficit in goods and services increased by 4.4% from the previous month to $60.3 billion. Economists had previously expected a deficit of $61 billion. Imports in March increased by 2.3%, mainly reflecting growth in imports of automobiles and consumer goods. The demand for overseas computer equipment was strong due to the boom in artificial intelligence industry construction, and imports of capital goods also reached a historical high. The above data are not adjusted for price changes. Exports in March increased by 2% compared to the previous month, mainly benefiting from record high exports of industrial goods such as crude oil and other petroleum products. Food, feed, and beverage exports reached their highest level since 2022. However, exports of consumer goods declined. The widening of the U.S. trade deficit in March The March trade data suggest that net exports in the first quarter had the biggest drag on U.S. Gross Domestic Product (GDP) over the past year. With tensions escalating in Iran and the almost blockade of the vital shipping chokepoint of the Hormuz Strait, which handles around one-fifth of global oil shipments, global trade faces further uncertainties. The U.S. oil and gas industry is expected to benefit from rising oil prices. Data from the U.S. Energy Information Administration shows that U.S. crude oil exports recently hit a record high. Since the outbreak of the conflict in Iran on February 28, the global benchmark Brent crude oil price has risen by over 50%. After adjusting for inflation, the U.S. goods trade deficit in March widened to $90.8 billion. Trade data indicate that, adjusted for price factors, the U.S. trade surplus in petroleum reached a record high. From a bilateral trade perspective, the U.S. trade deficit in goods with China has been expanding for the third consecutive month, and deficits with Canada and Vietnam have also increased slightly. The trade deficit with Mexico has narrowed slightly.