WASHINGTON – The U.S. trade deficit surged to a record $74.4 billion in March as an improving U.S. economy drove purchases of imported foreign goods.
The deficit, the gap between what America buys from abroad and what it sells to other countries, was 5.6% greater than the February gap of $70.5 billion, the Commerce Department reported Tuesday.
Imports rose 6.3% to $274.5 billion while exports increased 6.6% to $200 billion. The U.S. imports so much more than it exports that in dollar terms, the rise in imports was greater.
The politically sensitive trade deficit with China rose 11.6% to $27.7 billion which, as usual, was the largest deficit with any single country.
Through the first three months of this year, the U.S. trade deficit totals $212.8 billion, up 64.2% from the deficit during the same period last year, a time when the U.S. economy was essentially shut down by the coronavirus pandemic.
The United States recorded a deficit for all of 2020 of $681 billion, the largest annual gap since 2008 as the coronavirus disrupted global commerce and confounded then-President Donald Trump’s “America First” policies.
The U.S. economy is recovering much faster than the rest of the world and that is playing out in trade numbers as the gap widens. Americans are starting to spend again, while U.S. exporters are facing sluggish overseas demand in nations slower to recover.
“Stronger U.S. growth compared to trading partners will lead the trade deficit to grow in 2021,” said Oren Klachen, lead U.S. economist. “U.S. domestic demand will keep a strong pull on imports, thanks to improved health conditions, re-openings and historic fiscal expansion.”