U.S. trade fell sharply as President Trump’s global tariffs began to weigh on imports.
The U.S. trade deficit in goods and services narrowed sharply in April, falling to $61.6 billion compared with$138.3 billion in March as tariffs clamped down on global trade.
U.S. goods imports fell significantly in April, dropping by 16.3 percent from March, the data released from the Commerce Department showed, as tariffs on exports from China and other countries weighed on trade. The sharp drop reflected the fact that importers had rushed to bring many goods into the United States at the beginning of the year to get ahead of tariffs ordered by President Trump.
Exports rose slightly, up 3 percent from the previous month.
Mr. Trump has imposed tariffs on a variety of industries and trading partners since coming into office in January, raising the U.S. tariff rate to levels not seen in a century. The president has temporarily suspended some of the tariffs to allow for trade negotiations, but many are set to snap back into effect in early July unless deals are reached.
“The big swing in the trade deficit reflects the global trade war,” said Mark Zandi, the chief economist at Moody’s Analytics. “With the tariffs, goods imports collapsed in April, leading to a much smaller trade deficit.”
Mr. Zandi added that a smaller trade deficit would likely result in higher gross domestic product in the second quarter, since a trade deficit is subtracted from that figure. But he cautioned that the tariffs would still have negative consequences for American consumers and the economy.
“The higher U.S. tariffs have severely disrupted global trade, which will soon show up as higher prices for many of the goods Americans buy, weighing heavily on their purchasing power and spending, and by extension, the broader economy,” he said.