WASHINGTON – America’s trade imbalance grew larger in February despite exports reaching unprecedented levels, as incoming goods surged at an even faster pace, according to federal data released Thursday.
The Commerce Department’s Bureau of Economic Analysis and Census Bureau reported the trade gap expanded by 4.9% to reach $57.3 billion last month. January’s figures were adjusted to show a deficit of $54.7 billion, slightly higher than the initial $54.5 billion estimate. Economic forecasters had predicted February’s shortfall would climb to $61.0 billion.
Government agencies continue working to catch up on delayed data publications stemming from last year’s federal shutdown. Trade statistics remain unpredictable due to changing policy directions.
In February, the Supreme Court overturned President Trump’s sweeping tariff measures, which had been implemented using emergency powers legislation. Trump countered by establishing worldwide tariffs lasting up to 150 days.
The president has justified these trade barriers as essential for closing the trade gap and strengthening domestic manufacturing, despite the loss of 100,000 factory positions since January 2025.
Economic analysts anticipate that the ongoing U.S.-Israeli conflict with Iran will further complicate trade patterns. Shipping limitations through the Strait of Hormuz have affected various commodities, from energy resources to agricultural fertilizers.
February saw incoming goods climb 4.3% to $372.1 billion overall. Physical merchandise imports grew 5.0% to $291.5 billion, driven largely by capital equipment purchases that increased by $7.8 billion. This surge primarily involved computer systems, related accessories, and semiconductor chips, likely connected to artificial intelligence development and data center construction projects.
Industrial materials and supplies saw $3.1 billion in additional imports, mainly from increased crude oil purchases. Consumer product imports gained $2.2 billion, including a $1.0 billion rise in pharmaceutical imports. Vehicle, parts, and engine imports contributed another $1.6 billion increase.
On the export side, outgoing goods and services surged 4.2% to achieve a record $314.8 billion. Physical goods exports alone jumped 5.9% to an unprecedented $206.9 billion.
Industrial supplies and materials led export growth with a $10.2 billion increase to record levels, primarily from monetary gold and natural gas sales. Non-petroleum exports also set new highs.
The merchandise trade shortfall widened 3.0% to $84.6 billion in February. After accounting for inflation, the goods deficit rose by $0.5 billion, or 0.6%, to $83.5 billion.
Trade activity reduced economic growth in the previous quarter. The Atlanta Federal Reserve projects first-quarter GDP growth at a 1.9% annual rate, compared to the fourth quarter’s 0.7% expansion.
Trade imbalances with specific countries showed mixed results. The deficit with China grew from $12.5 billion in January to $13.1 billion in February, while the gap with Mexico expanded significantly by $4.1 billion to reach $16.8 billion.
Service exports increased $1.1 billion to a record $107.9 billion, boosted by travel, business services, financial services, and intellectual property licensing. However, transportation service exports declined.
Service imports jumped $1.3 billion to an all-time high of $80.6 billion, primarily due to increased intellectual property charges.
