U.S. President Donald Trump on Wednesday asserted that the country’s trade deficit has narrowed substantially because of tariffs his administration imposed in 2025, and he said the United States will move into a trade surplus in 2026, its first positive annual balance in decades.
In a social media post, the president claimed the trade gap "HAS BEEN REDUCED BY 78% BECAUSE OF THE TARIFFS BEING CHARGED TO OTHER COMPANIES AND COUNTRIES." The post did not specify the precise time frame for the 78% figure or provide a breakdown of the calculation behind the claim.
Mr. Trump added in the post that "(the deficit) WILL GO INTO POSITIVE TERRITORY DURING THIS YEAR." His comments came ahead of the release of official trade data for December.
Government data show the U.S. goods and services trade deficit contracted to $27.62 billion in October 2025 from a record-high $140.5 billion in March 2025 - a reduction of roughly 80% based on those two monthly figures. That sharp decline was followed by a widening to $56.82 billion in November 2025.
Preparations for the December report anticipated a monthly trade surplus of $55.50 billion in that month, which would represent the first positive monthly balance since 1975 according to government statistics. Despite that potential monthly improvement, the United States remains on track to record a substantial annual deficit for 2025.
Annual estimates indicate the U.S. will log an over $800 billion trade deficit for 2025, versus a record-high $1.2 trillion deficit in 2024. The 2025 annual gap was driven in part by a surge in imports early in the year, as domestic importers accumulated goods ahead of the administration's so-called liberation day tariffs imposed in April 2025.
The goods trade deficit specifically is expected to remain near record levels, at around $1.2 trillion for the year. That persistence reflects a continued imbalance between U.S. exports and imports of goods even as overall monthly flows showed pronounced swings.
The administration introduced tariffs across a wide array of goods during 2025, applying levies on imports from hundreds of countries at rates ranging from 10% to 50%. While many of the steepest measures were later scaled back after negotiations and trade agreements with several major trading partners, the tariffs coincided with a decline in imports from China.
U.S. goods imports from China fell to $288 billion in the January-November 2025 period, down from $401 billion in the same January-November period in 2024. Government data show that the reduction in Chinese imports was largely offset by higher imports from a number of other Asian and European suppliers.
The trade figures underscore significant month-to-month volatility in the U.S. external position during 2025, reflecting both policy interventions and changes in sourcing by U.S. importers. Observers will be watching the December report closely to see whether the anticipated monthly surplus materializes and how it feeds into full-year balances.
Summary
President Trump attributed a large fall in the U.S. trade deficit to tariffs enacted in 2025 and forecast a U.S. trade surplus in 2026. Official monthly data through late 2025 show steep declines from March to October followed by a partial reversal in November. Annual estimates still point to a substantial trade deficit for 2025, while goods deficits remain near record highs.
Key points
- The president claimed a 78% reduction in the trade deficit due to tariffs but did not specify the time period or methodology behind that figure - impacting public policy discourse and trade-sensitive sectors.
- Monthly data show the goods and services deficit fell from $140.5 billion in March 2025 to $27.62 billion in October 2025, then rose to $56.82 billion in November 2025 - demonstrating sizable monthly swings that can affect currency, commodities, and trade-exposed industries.
- Despite monthly improvements, the U.S. is expected to record an over $800 billion trade deficit for 2025, with the goods deficit alone near $1.2 trillion, a figure relevant for manufacturers, logistics, and import-reliant retailers.
Risks and uncertainties
- Monthly trade balances have shown significant volatility - a risk for market participants and sectors that depend on stable trade flows, such as exporters and import-dependent manufacturing.
- The shift away from Chinese imports toward other Asian and European suppliers could expose supply chains and logistics networks to reallocation risk and potential cost changes for importers and retailers.
- Policy reversals or further tariff adjustments remain possible given that many steep tariffs were later pared back after negotiations - introducing uncertainty for trade-exposed sectors and multinational firms.