Source: Economics Group of Wells Fargo Bank, N.A.
Summary
The U.S. trade deficit widened by a record amount in December, leaving the deficit 17% larger in 2024 than in 2023. While the sharp widening is likely temporary, tariff policy remains in focus and is set to disrupt trade flows over the course of the year. It’s not just actual policy but the prospect of such policies that can dictate economic behavior.Sharp Widening
The U.S. international trade deficit widened considerably to end 2024. At -$98.4 billion, the deficit has only been larger once, in March 2022, when it was temporarily larger for the month. The deficit widened by $19.5 billion during the month of December, which is the largest-one month move in data going back to the early 1990s. The larger deficit was due to a surge in imports (+3.5%, or $12.4 billion) and collapse in export growth (-2.6% or $7.1 billion).