President Donald Trump’s on-and-off tariffs have been rattling businesses across the world for months. With U.S. manufacturers and retailers front-loading their imports ahead of tariffs, the beginning of the year saw record-breaking trade deficits. April is expected to surpass even that, with economists predicting a deficit in goods and services of $135 billion, a 10% widening from the previous month. 

Here’s five things to watch in tomorrow’s Bureau of Economic Analysis report on trade: 

  1. The trade deficit is expected to break records, again. 

Imports of goods surged in January and February, with the trend expected to continue for March. Businesses were continuing to front-load their imports of industrial components to mitigate future price rises under new tariffs. Advanced numbers from the Census Bureau show the trade deficit in goods widened to $162 billion in March. 

Tomorrow’s report captures import and export data for goods and services in March, when trade uncertainty continued to build up and some new levies came into effect. Trump went back and forth on 25% tariffs against Mexico and Canada as exemptions and pauses were negotiated. Aluminum and steel imports became subject to 25% tariffs from March 12. But the data is still from the period before Trump’s “liberation day” announcement that overhauled the U.S. tariff regime and set off a new era of uncertainty. 

  1. Could this be the last bumper month for imports? 

“This is probably the last increase, the last record this year,” said Chris Low, chief economist at FHN Financial. There are already signs that trade has slowed since Trump’s bombshell tariff announcements on April 2. Data showed that ships sailing from China have declined over the last few weeks, owing to American companies pausing orders now that most Chinese imports face 145% levies. The Port of Los Angeles said it will have 35% less shipping volumes from China from this week in a dramatic drop compared to last year. Low said, “now it’s just waiting for confirmation a month from now in the data.” 

  1. The trade war is now in full swing. 

When the Trump administration shocked the world by announcing a 10% universal tariff on all imports on April 2, they also set additional levies on each trading partner. After a series of tit-for-tat tariff threats from both sides, the situation has escalated. China is now subject to a combined total levy of 145% on most goods, while the U.S. is subject to a 125% rate on exports to China and are also restricted from importing Chinese minerals crucial to U.S. industry. 

The stock market has been jittery on trade news. The April 2 announcement led to the S&P 500, Dow Jones and Nasdaq recording drops last seen in the early pandemic months of 2020, and sent indices across the world spiraling too. The markets have been reacting hopefully to every development surrounding negotiations and economic indicators since, creating volatility and uncertainty in the economy. 

  1. U.S. consumers are already seeing price increases

Alongside tariffs, the Trump administration ended the “de minimis” regulation last week, which exempts international packages valued under $800 from import levies. This is already having a direct impact on online shoppers. Chinese fast-fashion retailers Shein and Temu raised prices for U.S. facing goods, with some of their items now costing more than double the previous week. 

Retailers are starting to cancel orders from China, hesitant to pay the prohibitive levies or pass on the increased cost to consumers. Instead they are relying on their inventory white they wait to see whether tariffs will be implemented. The National Retail Foundation is warning that in the meantime, the new tariffs could translate into empty shelves for U.S. consumers within weeks and imports could be down 20% year-on-year in the second half of 2025. 

  1. The U.S. economy is starting to show signs of tariff impacts 

First quarter GDP was 0.3% down due to the large trade deficit dragging down the overall calculations. Nearly 5,000 motor vehicle and parts manufacturing jobs were lost in April according to the jobs report last week, industries that are vulnerable to increased tariff costs because they rely on  global supply chains. 

Consumer confidence is as low as the early period of the pandemic, and earnings calls show businesses are hesitant to invest or create jobs because of the uncertainty created over tariffs. With expectations of inflation high too, experts are concerned that the economy is headed for a slowdown.

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