Thursday, March 5, 2026

Why 2025's Record Breaking Trade Deficit Doesn't Hurt the Argument for Tariffs

By Kenneth Rapoza, Reporter/Columnist for Coalition for a Prosperous America

It was no surprise that the 2025 goods deficit broke another record, the Bureau of Economic Analysis (BEA) numbers showed recently. The year-ending goods deficit was $1.24 trillion, up from $1.21 trillion in 2024, with the monthly deficit for December looking like historic averages, nearly $100 billion. Nothing seems to stop America's appetite for imports. Record breaking tariffs yet record breaking imports. Tariffs are meant to curb imports and entice extra capacity and investment at home. At first glance, that does not look like the case at all, setting the narrative for the anti-tariff crowd that the America First trade agenda has failed. The trillion dollar-plus deficit can hurt Trump's messaging on tariffs. There is a twist to all of this. If not for tariff front running in the first quarter, we would not have beaten last year’s record. [more...]

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