The U.S. trade deficit has fallen by nearly half since President Trump’s Liberation Day tariff announcements in March, with the December gap coming in 48 percent smaller than the March peak.
The combined goods and services deficit dropped to $70.3 billion in December from $136.0 billion in March, a decline of $65.7 billion, according to Commerce Department data released Thursday. The goods deficit alone fell 39 percent, from $162.1 billion to $99.3 billion.
The dramatic nine-month improvement suggests Trump’s tariff strategy is achieving its core objective of reducing America’s trade imbalance. March represented the peak of the deficit as importers rushed to bring in goods ahead of announced tariff increases, creating what economists call “front-loading.” The subsequent decline reflects both reduced import volumes and increased export competitiveness.
The December figure, while higher than the October low of $58.5 billion, was driven by volatile gold flows and a surge in computer accessory imports related to artificial intelligence infrastructure investment. Excluding these temporary factors, the underlying trend continues to show significant improvement from the pre-tariff period.
The China deficit, which peaked at $295.5 billion in 2024, fell to $202.1 billion in 2025—the smallest in more than two decades—as Trump’s tariffs redirected trade flows and reduced Chinese import dependence.