U.S. Imports from China at Lowest Level Since 2020 as Trade Deficit Halves

In April, goods imports from China totaled $28.3 billion, marking the lowest amount since April 2020 and falling from $34.9 billion in March. At the same time, U.S. imports didn’t fall just because of China. Overall, they fell by 16.3% to $351 billion while exports increased by 3% to $289.4 billion. That equates to a goods trade deficit of $61.6 billion, which fell by 55% month-over-month from a record-high of $140.9 billion in March. April’s trade deficit was also below the expectation for $63.3 billion.

Tariffs Begin to Slash Trade Deficit

March incurred a high trade deficit given that businesses sought to front-run tariffs enacted under the Trump administration. That strategy cooled off in April as tariffs became active, resulting in a significant trade deficit decline.

A lower trade deficit will have a positive effect on gross domestic product (GDP), given that exports are added and imports are subtracted from the GDP calculation. At the same time, reduced trade reliance with China could result in higher prices for consumers, which could lead to inflation, and product shortages.

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