US trade deficit hits record $74.4 billion in March

The U.S. trade deficit surged to a record $74.4 billion in March as an improving U.S. economy boosted purchases of imported foreign goods

WASHINGTON — The U.S. trade deficit surged to a record $74.4 billion in March as an improving U.S. economy drove purchases of imported foreign goods.

The deficit, the gap between what America buys from abroad and what it sells to other countries, was 5.6% greater than the February gap of $70.5 billion, the Commerce Department reported Tuesday.

Imports rose 6.3% to $274.5 billion while exports increased 6.6% to $200 billion. The U.S. imports so much more than it exports that in dollar terms, the rise in imports was greater.

The politically sensitive trade deficit with China rose 11.6% to $27.7 billion which, as usual, was the largest deficit with any single country.

The U.S. economy is recovering much faster than the rest of the world and that is playing out in trade numbers as the gap widens. Americans are starting to spend again, while U.S. exporters are facing sluggish overseas demand in nations slower to recover.

During his four years in office, Trump pursued a get-tough trade strategy that employed punitive tariffs on other country’s products as a way of wiping out America’s trade deficits with the rest of the world and restoring millions of lost manufacturing jobs.

Trump sought to narrow the trade gap by imposing tariffs on imported goods on a scale not seen since the trade wars of the 1930s that contributed to pushing the United States and the rest of the world into a Great Depression.

Trump’s efforts failed to alter trade imbalances and angered U.S. allies along with competitors such as China. So far, however, the Biden administration has not rolled back the Trump policies.

For March, America’s surplus in services trade, items such as airline flights and consulting fees, shrank to new decade low of $17.1 billion, a drop that analysts blamed on COVID-19 restrictions that have limited tourism. Normally, the United States is able to reduce its overall deficit by a larger amount thanks to larger surpluses in services trade.

The deficit in goods totaled a record $91.6 billion in March, up from a March goods deficit of $87.9 billion.