- By Shibra Arshad
- Fri, 20 Feb 2026 04:25 PM (IST)
- Source:JND
Currently, America often grabs headlines for either threatening countries to levy additional tariffs charged on their products or demanding comparitively lower or no tariffs on its exports. Despite waging tariff war and imposing reciprocal, additional and in some cases punitive tariffs on foreign products entering the US, its trade deficit remained above 901 million dollars in 2025, raising questions about Trump’s policies.
According to the US Department of Commerce, America's total trade deficit in 2025 was just above 901 billion, only a small drop from 904 billion dollars in 2024. The gap remains very large.
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President Donald Trump put double-digit tariffs on imports from most countries in 2025. The goal was to reduce imports and help American industries grow. But the numbers show the plan did not fully work.
More Chip Imports from Taiwan
US exports grew by 6 per cent last year, while imports rose by about 5 per cent. The trade gap in machinery and aircraft increased by 2 per cent, reaching 1.24 trillion dollars. A big reason was that American companies imported more computer chips and technology from Taiwan to support artificial intelligence investments.
Less Trade With China
The trade deficit with China fell 32 per cent to 202 billion dollars. Both exports to China and imports from China dropped. But instead of stopping trade, it simply shifted to other countries.
Big Jump In Deficits With Taiwan, Vietnam
The deficit with Taiwan doubled to 147 billion dollars, and with Vietnam it rose 44 per cent to 178 billion dollars. The deficit with Mexico also increased to dollar 197 billion (from dollar 172 billion in 2024).On the other hand, the deficit with Canada dropped 26 per cent to dollar 46 billion.
In services like banking and tourism, the US had a surplus of 339 billion dollars, higher than 312 billion dollars in 2024.
Early Rush Before Tariffs
Many companies imported more goods at the start of the year before tariffs began, which pushed the deficit higher in the first three months. It later came down a bit.
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Who Pays Tariffs?
US importers pay the tariffs, and they often pass the cost to customers through higher prices. However, economists say the effect on inflation was smaller than expected. Trump says tariffs will make American manufacturing stronger and bring more money to the government. But the latest numbers show the strategy has not yet delivered the full results he wanted.