New federal data show rising demand for technology imports widened the deficit despite continued strength in outbound shipments.
By yourNEWS Media Newsroom
The U.S. trade deficit increased in February as a rebound in imports outpaced record-setting export growth, according to data released April 2 by the Bureau of Economic Analysis.
The gap in goods and services widened by nearly 5 percent to $57.3 billion, coming in below economists’ expectations of a $59.2 billion shortfall. Despite the monthly increase, the deficit for the first two months of the year remains significantly lower than the same period in 2025, declining by approximately 55 percent.
Exports rose by more than 11 percent year-over-year, while imports fell by over 9 percent during the same timeframe. However, February marked a shift, with imports increasing sharply.
Total imports climbed 4.3 percent, or $15.2 billion, to $372.1 billion. Much of the increase was driven by demand for capital goods, including computers and semiconductors, which rose by $7.8 billion. Additional gains included a $3.1 billion increase in industrial supplies and a $2.2 billion rise in consumer goods.
Exports also grew, increasing 4.2 percent, or $12.6 billion, to a record $314.8 billion. The largest contribution came from industrial supplies and materials, which rose by $10.2 billion.
Economists pointed to ongoing investment in artificial intelligence infrastructure as a key factor behind rising imports. Priscilla Thiagamoorthy of BMO Economics said the data reflect strong domestic demand, noting that “that strength is pulling in imports fast enough to widen the trade gap.”
She added that net exports are expected to weigh on first-quarter economic growth as companies continue sourcing technology inputs from overseas.
The Atlanta Federal Reserve projects first-quarter GDP growth at 1.9 percent, with trade expected to reduce the final figure by approximately 0.2 percentage points. Economic growth slowed to 0.7 percent in the fourth quarter of the previous year.
The data were released one year after President Donald Trump introduced sweeping tariffs on foreign imports. Although those tariffs were later struck down by the Supreme Court, the administration implemented a temporary 10 percent universal tariff for a 150-day period.
Trade balances with several major partners showed improvement. The U.S. trade deficit with China declined by $1.7 billion to about $11.01 billion. Trump is scheduled to meet with Chinese President Xi Jinping in Beijing on May 14 and 15, with a reciprocal visit planned later in Washington.
“I look very much forward to spending time with President Xi in what will be, I am sure, a Monumental Event,” Trump said in a March 25 Truth Social post.
The deficit with the European Union narrowed by $3 billion to $1.68 billion as lawmakers in Europe moved forward with legislation tied to a trade agreement with the United States. The agreement includes provisions requiring adjustments to tariffs, including duties on steel and aluminum.
The U.S. trade surplus with Switzerland increased by $4.8 billion to $7.8 billion amid ongoing negotiations between the two countries. Discussions are expected to continue as the United States conducts trade reviews involving several partners.
In North America, the deficit with Canada dropped sharply to $801 million from $3.86 billion in January, while the trade gap with Mexico widened by nearly $5 billion to $15.4 billion.
A joint review of the United States–Mexico–Canada Agreement is scheduled for later this year, as officials continue discussions on trade terms. U.S. Trade Representative Jamieson Greer said Canada has progressed more slowly in negotiations compared to Mexico.
The latest trade data underscore the balance between strong export performance and rising import demand, particularly in technology sectors, as policymakers monitor the broader economic outlook.
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