U.S. Trade Deficit Narrowed Slightly in 2025 Despite Tariffs

The U.S. trade deficit narrowed by just 0.2% in 2025, according to Bureau of Economic Analysis data released February 19, 2026. While tariffs reduced the goods deficit with China by 30% to $93.4 billion, the total deficit decreased by only $2.1 billion. Overall imports rose 4%, fueled by a surge in AI-related high-tech spending. Deficits with Taiwan nearly doubled to $146.7 billion, and the imbalance with Vietnam reached $178.1 billion, largely offsetting improvements with China and Canada. Economists indicate tariffs shifted trade origins rather than shrinking the aggregate deficit.