The United States trade deficit widened in February as a surge in imports offset record growth in exports, signaling that trade could continue to drag on economic growth in the first quarter.
According to data released on Thursday by the Commerce Department’s Bureau of Economic Analysis (BEA) and the Census Bureau, the trade gap increased by 4.9% to $57.3 billion.
January’s deficit was revised slightly higher to $54.7 billion from the previously estimated $54.5 billion.
Economists surveyed by Reuters had forecast the February deficit to rise to $61.0 billion.
Imports surge driven by Technology and Energy
Imports climbed 4.3% to $372.1 billion in February, with goods imports rising 5.0% to $291.5 billion.
Capital goods were a major contributor, increasing by $7.8 billion, largely due to computers, semiconductors, and related accessories.
Analysts suggest that this surge is linked to investments in artificial intelligence and the construction of new data centers.
Industrial supplies and materials imports grew by $3.1 billion, primarily due to higher crude oil shipments.
Consumer goods imports rose $2.2 billion, driven in part by a $1.0 billion increase in pharmaceutical preparations.
Automotive imports, including vehicles, parts, and engines, added $1.6 billion to the total.
Exports surge to new highs
Exports jumped 4.2% to a record $314.8 billion, with goods exports soaring 5.9% to an all-time high of $206.9 billion.
Industrial supplies and materials led the increase, rising $10.2 billion, supported by exports of monetary gold and natural gas.
Non-petroleum goods also reached their highest export levels on record.
Services exports rose $1.1 billion to a record $107.9 billion, aided by growth in travel, business services, financial services, and intellectual property charges, although transport services exports declined.
Charges for imported intellectual property increased, likely reflecting a temporary uplift from Winter Olympics broadcasting rights.
Trade gap with China and Mexico expands
The goods trade deficit with China increased to $13.1 billion from $12.5 billion in January.
Meanwhile, the shortfall with Mexico expanded sharply by $4.1 billion to $16.8 billion.
Overall, the goods trade deficit widened 3.0% to $84.6 billion in February.
When adjusted for inflation, the deficit increased slightly by $0.5 billion, or 0.6%, to $83.5 billion.
Implications for Economic growth
Trade subtracted from GDP growth in the fourth quarter of 2025, and the Atlanta Federal Reserve projects a 1.9% annualized GDP growth rate for the first quarter.
The economy had expanded at a 0.7% pace in the previous quarter.
The US merchandise trade deficit with China widened to $13.1 billion, while the gap with Mexico also expanded. In contrast, the deficit with Canada narrowed to its smallest level since the pandemic.
Separate data released Thursday showed initial jobless claims fell to 202,000 last week, hovering near a two-year low.
Analysts note that global events, including the US-Israeli tensions with Iran and shipping restrictions through the Strait of Hormuz, may continue to affect trade volumes.
This post US trade deficit rises despite strong export growth may be modified as updates unfold
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