Bold, Confident, And $900 Billion Off The Mark

2025 was supposed to be the turning point. After nearly a trillion dollars in annual trade deficits, America was ready to change course.

In his second term, Donald Trump put tariffs at the center of his economic agenda.

The message was clear: shrink the deficit and make the rest of the world pay.

According to Trump’s latest tweet, the U.S. trade gap has been reduced by 78% and that “it will go into positive” during this year for the first time in decades.

But the real data is telling a different story.

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On Thursday, the U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit totaled $70.3 billion in December.

That marked a $17.3 billion jump from November’s $53.0 billion and well above economist expectations of $55 billion.

But here is the striking part: For the full year, the deficit reached $901.5 billion. That was barely changed from $903.5 billion in 2024.

Even with sweeping Trump’s tariffs in place, the trade balance stayed deep in the red.

Even w/those tariffs in place, the US trade deficit stayed deep in the red. At $901bn, it marked the third-largest gap between imports and exports in the country’s history. https://t.co/QXQVTkhRNi pic.twitter.com/u0zd3xh4HA

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The U.S. posted trade surpluses with the Netherlands at $60.7 billion, South and Central America at $52.4 billion, the United Kingdom at $32.2 billion, Hong Kong at $28.5 billion and Brazil at $14.4 billion.

However, deficits remained large across major partners.

The deficit with the European Union reached $218.8 billion. China stood at $202.1 billion. Mexico totaled $196.9 billion. Vietnam came in at $178.2 billion. Taiwan reached $146.8 billion.

The Taiwan gap widened by $73.0 billion to $146.8 billion. Exports rose $12.1 billion to $54.7 billion, but imports surged $85.2 billion to $201.4 billion, likely affected by semiconductors.

The Vietnam deficit increased by $54.7 billion to $178.2 billion. Exports grew $2.6 billion to $15.7 billion, while imports jumped $57.3 billion to $193.8 billion.

China was the exception. The deficit narrowed by $93.4 billion to $202.1 billion. Exports fell $36.9 billion to $106.3 billion and imports dropped $130.4 billion to $308.4 billion.

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Italian economist Riccardo Trezzi explained the broader trade picture.

“In recent weeks, some political and academic commentators have celebrated the decline in the trade deficit and linked it to tariffs. However, the latest data — including today’s release — confirm the opposite narrative. The deficit surged in early 2025 as firms front-loaded imports ahead of the tariffs,” he said in a post on social media X.

In the following months, imports fell along with the deficit as inventories remained elevated. Yet, in the latest month of the year, the deficit returned to its starting point as those inventories were likely depleted.

In other words, companies rushed goods into the country before tariffs hit. That inflated imports early in the year.

Later, imports cooled as businesses worked through stockpiles. The deficit narrowed briefly.

By year-end, it snapped back.

The final tally leaves 2025 as the third-largest trade gap on record.

For investors betting on a structural economic reset, the data show something else: tariffs reshuffled trade flows, but they did not erase America’s nearly $1 trillion imbalance.

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This article Trump’s Trade Math: Bold, Confident, And $900 Billion Off The Mark originally appeared on Benzinga.com