U.S. Trade Deficit Narrows by 55% in April

By Ryan Hanrahan

CNBC’s Jeff Cox reported that “the U.S. deficit with its global trading partners tumbled by the largest amount on record in April as companies and consumers no longer rushed to get imports ahead of President Donald Trump’s tariffs.”

“Following a record-breaking surge in the trade imbalance, the deficit slid to $61.6 billion, a decrease of $76.7 billion from the prior month and below the Dow Jones consensus forecast for $66.3 billion, according to a Commerce Department report Thursday,” Cox reported. “The move reverses a massive surge in imports that came ahead of Trump’s April 2 ‘liberation day’ announcement.”

“Imports slowed sharply in April, falling 16.3% to $351 billion. At the same time, exports accelerated, rising 3%,” Cox reported. “‘Deficit’ implies something bad, but in this case the story is more nuanced. International trade has been good for the U.S. economy — importing more than we export has benefited Americans, by and large,’ said Elizabeth Renter, senior economist at consumer site NerdWallet. ‘So when the trade deficit shrinks we should be cautious of interpreting this as fully positive news.’”

“On a year-to-date basis, the deficit has risen 65.7% from the same period in 2024,” Cox reported. “The largest goods imbalance came with China, at $19.7 billion, followed by the European Union ($17.9 billion) and Vietnam ($14.5 billion).”

Ag Trade Deficit Projected to Increase Slightly

Agri-Pulse’s Philip Brasher reported that “the Agriculture Department is projecting no improvement in the U.S. agricultural trade outlook for fiscal 2025 as the department lowered its forecast for livestock product exports, offsetting increases for grains and oilseeds.”

“The latest forecast projects that the ag trade deficit will grow to $49.5 billion for FY25, which ends Sept. 30, up from the $49 billion deficit projected in February and the $31.8 billion deficit recorded in FY24,” Brasher reported. “The deficit was $17.2 billion in FY23 after slight surpluses in FY21 and FY22 at $8.5 billion and $1.9 billion, respectively. There were slight deficits in FY19 and FY20.”

“USDA left its forecast for FY25 ag exports unchanged at $170.5 billion but raised its estimate for imports by $500 million to $220 billion, leading to the higher projected deficit,” Brasher reported. “The department raised its forecast for FY25 grain and feed exports to $37.9 billion, up from $37.7 billion in February, and raised the estimate for oilseed shipments to $33.2 billion, up from $32.4 billion.”

Ag Trade Report Delayed and Redacted

Politico’s Marcia Brown reported that “Trump administration officials delayed and redacted a government forecast because it predicts an increase in the nation’s trade deficit in farm goods later this year, according to two people familiar with the matter.”

“The numbers run counter to President Donald Trump’s messaging that his economic policies, including tariffs, will reduce U.S. trade imbalances,” Brown reported. “The politically inconvenient data prompted administration officials to block publication of the written analysis normally attached to the report because they disliked what it said about the deficit.”

“The published report, released Monday but dated May 29, includes numbers that are unchanged from how they would’ve read in the unredacted report, said the people, who were granted anonymity to discuss internal decision-making,” Brown reported. “Policymakers, farm groups and commodities traders rely on the closely watched report, which the Agriculture Department issues quarterly, for its analysis of imports and exports of major farm commodities including cotton and livestock. The highly unusual rollout could raise questions about potential political meddling with government reports that have traditionally been trusted for decades.”

“A USDA spokesperson blamed the delay on an internal review,” Brown reported. “‘The report was hung up in internal clearance process and was not finalized in time for its typical deadline,’ said USDA spokesperson Alec Varsamis in a statement. ‘Given this report is not statutory as with many other reports USDA does, the Department is undergoing a review of all of its non-statutory reports, including this one, to determine next steps.’”

U.S. Trade Deficit Narrows by 55% in April was originally published by Farmdoc.