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The US trade goods deficit surged to a record high in January as companies hoovered up supplies of foreign products and metals ahead of the expected imposition of tariffs by President Donald Trump.
The gap between exports and imports of goods jumped by more than 25 per cent from the previous month to $153bn, according to figures from the commerce department. That massively outweighed economists’ predictions for a shortfall of $116bn, according to a Bloomberg survey ahead of the numbers.
The figures suggested American companies had been stockpiling goods purchased overseas as they prepared for tariffs on a host of the country’s closest trading partners, including Canada, Mexico, China and the EU, analysts said.
Among the possible drivers were shipments of gold bullion into the US, they added.
“It’s a massive increase,” said James Knightley, an economist at ING. “It strongly hints that a lot of US retailers and manufacturers are very nervous about supply chains and are wanting to get ahead of the threat of any tariffs.”
While US exports rose a seasonally adjusted 2 per cent on the prior month, imports were up by more than 11 per cent, according to the advanced data for the month. Imports of industrial supplies were up nearly 33 per cent.
Full breakdowns of the geographical pattern of the data are not yet available. One possibility, analysts said, is that the data had been driven by a surge in gold shipments from Europe to New York amid fears that Trump would impose tariffs on bullion. Analysts at Goldman Sachs said they expected this impact on the data to reverse “relatively quickly”.
The value of the gold stored at the New York Comex exchange surged by about $25bn in January, according to Financial Times calculations, as traders pulled gold from London and moved it to New York to get ahead of potential tariffs.
However, shipments of consumer goods were also up sharply on the month, jumping by more than 8 per cent, according to the US data — although automotive imports rose a modest 2 per cent.
The ports of Los Angeles and Long Beach, California — two of the nation’s most active container ports — each recorded their busiest January on record. Long Beach said the rise was “largely driven by retailers moving cargo ahead of the anticipated tariffs on goods from China, Mexico and Canada”.
Imports of photovoltaic panels and other solar energy equipment increased fourfold between December and January to more than 59,000 20-foot equivalent container units, according to ImportGenius, a trade data aggregator.
US-based manufacturer First Solar this week told analysts that warehouse rental rates had increased in part because of “a surge of imports as manufacturers seek to mitigate the expected tariff risk following the November election”.
This week Trump said he would press ahead with 25 per cent levies on EU products. He has already imposed an extra 10 per cent duty on China, and reiterated that 25 per cent tariffs on Canada and Mexico would come into force on March 4.
Further tariffs loom on China, as well as reciprocal tariffs on countries around the world later in the spring.
Many US corporate executives have downplayed concern over the levies. “We’ve been through this before and we have a great track record of working with our suppliers to make sure we stay as sharp as possible on value,” Richard McPhail, chief financial officer at Home Depot, said in an interview on Tuesday.
“At this point, though, we don’t know how much might be implemented or which products.”
Brad Setser, a senior fellow at the Council on Foreign Relations, said the 25 per cent tariffs that Trump had threatened on some economies’ products were “pretty brutal”, meaning that companies would seek to get ahead of them.
“These are big enough tariffs that people are not indifferent to them but will try to avoid them,” he said.
Knightley said the latest data would contribute to downside risks to first-quarter GDP data.
“The narrative is shifting to the idea that [economic] euphoria around Donald Trump might be a bit overplayed,” he said.
Additional reporting by Valentina Romei
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