Al-Naba’a
The U.S. trade deficit widened to a record high in March as companies rushed to import goods ahead of the implementation of tariffs, contributing to a contraction in GDP during the first quarter of this year—the first such decline in three years.
According to data from the U.S. Department of Commerce’s Bureau of Economic Analysis, the trade deficit rose by 14% to a record $140.5 billion, up from $123.2 billion in February after data revisions.
Economists had expected the deficit to rise to $137 billion, compared to the previous estimate of $122.7 billion for February.
U.S. Imports Surge
The broad tariffs imposed by U.S. President Donald Trump—including a hike of up to 145% on Chinese imports—prompted companies to accelerate imports to avoid additional costs.
Although reciprocal tariffs with most U.S. trade partners were temporarily suspended for 90 days, the implementation of tariffs on Chinese goods starting in early April triggered a trade war with Beijing.
U.S. imports rose by 4.4% in March to a record $419 billion, with goods imports climbing 5.4% to $346.8 billion. In contrast, exports increased only slightly by 0.2% to a new record of $278.5 billion, while goods exports rose 0.7% to $183.2 billion.
The U.S. government reported last week that the trade deficit subtracted 4.83 percentage points from GDP growth in the first quarter—a record figure—causing the economy to contract at an annual rate of 0.3%, the first decline since Q1 2022.
UK Economy Contracts
In the United Kingdom, the private sector economy contracted in April for the first time in 18 months, according to final data from the S&P Global Composite Purchasing Managers' Index (PMI), which tracks growth across various private-sector industries.
The index dropped to 48.5 in April from 51.5 in March, following an upward revision from the initial estimate of 48.2. However, it remained below the 50-point threshold that separates growth from contraction.
The services PMI—which accounts for about 80% of the UK’s GDP—fell to 49 in April, down from 52.5 in March.
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