The U.S. trade deficit saw a dramatic decrease in April as companies adjusted to President Trump’s ever-changing tariff policy, according to a Commerce Department report.
The deficit, or amount by which imports from other countries exceeded U.S. exports, was $61.6 billion in April, meaning it dropped $76.7 billion from $138.3 billion in March.
The department said Friday it was the sharpest monthly decrease on record. Wall Street had forecasted a deficit closer to $66 billion for April.
The dramatic change reflects a U-turn in imports as Mr. Trump tweaks his trade strategy.
Importers rushed to bring in products in the early months of the year as Mr. Trump considered heavy levies on other nations.
He proposed “Liberation Day” tariffs in April that were heftier than expected. While the president paused the biggest tariffs for 90 days, a blanket 10% tariff on imports went into effect alongside sector-specific tariffs on steel, aluminum and automobiles and car parts made outside the U.S.
The Commerce Department said Americans purchased fewer finished metals, cellphones, pharmaceuticals and other products from abroad.
Mr. Trump’s trade agenda is fueled by his desire to close trade deficits and promote manufacturing in the U.S. He says too many countries tap into the rich American market while closing their doors to U.S. producers who want to sell their products abroad.
He points to places like China that subsidize their industries and flood the world with cheap goods, undercutting U.S. manufacturers.
Some economists say trade deficits are not inherently bad. Americans can benefit from trade by getting cheaper products that improve their spending power, and certain countries have geographic or workforce advantages that make their products desirable.
Some of Mr. Trump’s critics say he should take a narrower approach, such as limiting tariffs to products like steel and select industries.
Recently, the U.S. Court of International Trade held that Mr. Trump overstepped his authority with sweeping tariffs on other nations. An appeals court paused the implementation of that ruling.
