Trade wars ignites furious increase in imports

Computer imports surged ahead of the Trump administration tariffs as retailers tried to beat an expected increase in prices.

The numbers: U.S. businesses brought in record boatloads of foreign goods in March for the fourth month in a row as they tried to beat price increases tied to the Trump tariffs — assuring a weak GDP report in the first quarter.

The U.S. trade deficit in goods surged 10% in March to an all-time high of $162 billion, the government said Tuesday.

The deficit began to surge in December after Donald Trump won the presidential election and many businesses took seriously his vow to raise tariffs. They’ve been importing extra amounts of cell phones, computers, drugs, clothes and many other goods to try to ride out the trade wars.

Trade deficits subtract from gross domestic product, the official scorecard of the U.S. economy. The record trade gap in the first quarter is expected to produce a GDP reading of just 0.4% annual growth, which would be the smallest increase in nearly three years.

Forecasters might further reduce GDP estimates after the latest surge in the trade deficit.

Key details: U.S. goods imports rose 5% in March to $342.7 billion. They are also up a whopping 31% compared to the same month in 2024.

Exports of U.S.-made goods rose a smaller 1.2% to $180.8 billion in March. Exports could begin to fall if other countries retaliate with tariffs of their own, as some have.

Also in the report, the government said retail inventories fell 0.1% and wholesale inventories increased 0.5%.

Higher inventories add to GDP, potentially offsetting some of the drag from the record trade deficit.

Big picture: President Trump has vowed to slash a chronic U.S. trade deficit, but for now tariffs have pushed them to new highs as businesses continued to “front run” the tariffs.

Yet the appetite for foreign goods began to shrink as the duties started to kick in in late March and early April. Major U.S. ports show a big drop in ships planning to arrive in May because high tariffs make many foreign goods too expensive to sell.

The trade deficit could fall sharply in the coming months if high tariffs remain in place, but economists say prolonged trade wars could severely damage the U.S. economy and even cause a recession.

Market reaction: The Dow Jones Industrial Average and S&P 500 were set to open slightly lower in Tuesday trades.