US trade deficit narrowed by 25% in January on exports boost
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The news: The US trade deficit declined in January, extending a volatile run for the country’s trade balance spurred on by the administration’s evolving trade policy.
The numbers: Data released by the US Commerce Department on Thursday showed US imports declined 0.7% from the month prior, while exports expanded by 5.5%.
January’s deficit of USD54.5 billion ($76.91 billion) is down 25% from the monthly deficit notched in December. Analysts polled by the Wall Street Journal had anticipated a US67 billion deficit for the first month of the year.
The context: The jump in exports was driven by an increased in gold sales to overseas buyers, while the smaller decline in imports reflected a decline in US purchases of pharmaceuticals.
Trade flows were hit by large monthly swings in 2025 as the economy reacted to ongoing tariff announcements by US President Donald Trump, who has made resetting the US trade balance by reducing reliance on foreign goods a key policy of the administration.
Tariff rates were unchanged in January, with the US Supreme Court striking down many of Trump’s levies in February, before the President began re-imposing the measures under different authorities.
The sources: Bureau of Economic Analysis, Bloomberg, WSJ
