Republican-controlled House passes resolution to overturn President Trump’s tariffs on Canada
The Republican-controlled House of Representatives passed a resolution repealing President Donald Trump’s tariffs on Canada.
The U.S. trade deficit widened sharply in December on the back of a surge in imports, and 2025 goods shortages will be the largest on record despite President Donald Trump’s tariffs on foreign goods.
The trade gap rose 32.6% to $70.3 billion, the Commerce Department’s Bureau of Economic Analysis and Census Bureau said Thursday. A Reuters poll of economists predicted the trade deficit would narrow to $55.5 billion. The trade deficit in 2025 narrowed by 0.2% to $901.5 billion. The goods trade gap widened by 2.1% to a record $1.24 trillion.
Last year, President Trump imposed intensive tariffs on trading partners aimed at, among other things, addressing trade imbalances and protecting U.S. industry. However, punitive tariffs did not result in a manufacturing renaissance, with factory employment dropping by 83,000 from January 2025 to January 2026.
The report was delayed because of last year’s government shutdown. Imports in December increased by 3.6% to $357.6 billion. Merchandise imports rose 3.8% to $280.2 billion, driven by a $7 billion increase in industrial supplies and materials, primarily non-monetary gold, copper and crude oil.
Capital goods imports increased by $5.6 billion, driven by computer accessories and communications equipment. This increase is likely related to the construction of data centers that support artificial intelligence.
However, imports of consumer goods declined, pushed down by pharmaceuticals. There have been major fluctuations in pharmaceutical imports.
Merchandise imports increased by 4.3% to $3.44 trillion in 2025.
Exports in December decreased by 1.7% to $287.3 billion. Exports of goods fell 2.9% to $180.8 billion, weighed down by an $8.7 billion decline in industrial supplies and materials, mainly non-monetary gold. Exports of other goods also declined.
However, thanks to semiconductors, exports of capital goods increased. Exports of consumer goods, including pharmaceuticals, increased. Merchandise exports increased by 5.7% to $2.2 trillion in 2025.
The trade deficit in goods expanded by 18.8% to $99.3 billion. Services imports increased by $2 billion to $77.4 billion in December, driven by growth in transportation and travel services. Exports of services increased by $500 million to $106.5 billion.
The larger-than-expected trade deficit could prompt economists to cut their forecasts for fourth-quarter gross domestic product (GDP) growth. The BEA is scheduled to release its delayed fourth-quarter GDP forecast on Friday. The economy likely grew at an annual rate of 3.0% last quarter, after expanding at a 4.4% pace in the July-September period, according to a Reuters poll of economists.
