US trade deficit widens in February as imports offset record exports

The U.S. trade deficit widened in February as a rebound in imports offset strong growth in exports, which increased to a record high, potentially keeping trade on track to subtract from economic growth in the first quarter.

The trade gap increased 4.9% to $57.3 billion, the Commerce Department's Bureau of Economic Analysis and Census Bureau said on Thursday. Data for January was revised to show the deficit narrowing to $54.7 billion instead of $54.5 billion as previously estimated. Economists polled by Reuters forecast the trade deficit rising to $61.0 billion in February.

The BEA and Census Bureau are still catching up on data releases following last year's government shutdown. Trade data continues to be volatile amid shifting policy. 

The U.S. Supreme Court in February struck down President Donald Trump's broad tariffs, which he pursued under a law meant for use in national emergencies. Trump, however, responded by imposing a global tariff for up to 150 days. 

Trump has defended the tariffs as necessary to address the trade deficit and revive the nation's industrial base, though 100,000 factory jobs have been lost since January 2025.

Economists expect the U.S.-Israeli war with Iran, which has led to shipping restrictions impacting goods ranging from energy products to fertilizers through the Strait of Hormuz, to reduce trade volumes. 

Imports increased 4.3% to $372.1 billion in February. Goods imports rose 5.0% to $291.5 billion. They were boosted by imports of capital goods, which increased $7.8 billion, mostly reflecting computers, computer accessories and semiconductors. These imports are likely linked to artificial intelligence and the construction of data centers.

Imports of industrial supplies and materials increased $3.1 billion, mostly lifted by crude oil. Consumer goods imports rose $2.2 billion amid a $1.0 billion increase in pharmaceutical preparations. Imports of automotive vehicles, parts and engines increased $1.6 billion.

Exports jumped 4.2% to a record high $314.8 billion. Goods exports soared 5.9% to an all-time high of $206.9 billion.

Exports of industrial supplies and materials increased $10.2 billion to a record high, driven by monetary gold and natural gas. Exports of non-petroleum goods were also the highest on record.

The goods trade deficit widened 3.0% to $84.6 billion in February. When adjusted for inflation, the goods deficit increased $0.5 billion, or 0.6%, to $83.5 billion. 

Trade subtracted from gross domestic product growth in the fourth quarter. The Atlanta Federal Reserve is forecasting GDP increasing at a 1.9% annualized rate in the first quarter. The economy grew at a 0.7% pace in the fourth quarter.

The goods trade deficit with China increased to $13.1 billion in February from $12.5 billion in January, while the shortfall with Mexico swelled $4.1 billion to $16.8 billion.

Exports of services increased $1.1 billion to a record $107.9 billion amid rises in travel, other business services, financial services and charges for the use of intellectual property. But exports of transport services fell.

Imports of services jumped $1.3 billion to an all-time high of $80.6 billion, boosted by charges for the use of intellectual property.