Six of the nation's top 10 trade partners set records in 2025, according to U.S. Census Bureau data released today.
WorldCity analysis of U.S. Census Bureau data
2025 U.S. Trade, At $5.6 Trillion, Deficit Set Records, Despite Tariffs
The U.S. trade deficit with China fell in 2025 primarily due to aggressive, high-level tariffs on Chinese goods and a strategic, accelerated effort by companies to shift supply chains out of China. Although the overall U.S. goods deficit hit a record, bilateral trade with China dropped 28%. The decline reflects long-term trade war policies, reduced reliance on Chinese manufacturing, and geopolitical shifts,
.
Key factors for the falling deficit in 2025 include:
- Intensified Tariff Policies: Increased tariffs on Chinese products forced U.S. importers to seek alternative suppliers, reducing reliance on Chinese goods.
- Supply Chain Diversification: Businesses actively moved supply chains out of China to avoid duties, with a notable shift toward other Asian and North American partners.
- Strategic Shifting: Despite an early 2025 surge in imports as companies stocked up before new tariffs, the deficit decreased in the latter part of the year.
- Geopolitical Factors: Ongoing trade tensions and trade policies dating back to the first Trump administration and continued through 2025, resulted in lower import volumes from China.
