Economists expect the U.S. trade deficit for goods and services to widen to $61.1 billion in February, per Bloomberg’s consensus estimates. The U.S. International Trade Balance report for February arrives April 2 at 8:30 a.m. EST., symbolically marking the one-year anniversary of “Liberation Day.”
Here are five things to look out for in tomorrow’s report.
A Rear-View Snapshot
The trade data arriving this Thursday will essentially be a look in the rearview mirror, capturing a chaotic month of shifting policies.
For the first 20 days of February, American importers operated within the tariff framework Donald Trump imposed last year under the 1977 International Emergency Economic Powers Act. This era came to an end on Feb. 20, when the Supreme Court ruled those tariffs illegal. Four days later, Trump launched a temporary, across-the-board 10% tariff for 150 days, invoking the never-before-used Section 122 of the 1974 Trade Act.
Furthermore, the report will not yet show the economic shockwaves of the war with Iran that began on Feb. 28—a conflict that has since sent oil prices surging and added a new layer of uncertainty to the global economy.
Widening Deficit
Economists expect the deficit in the trade for goods to widen due to the “import rush” recorded in February. The Imports Index—a key gauge of whether American manufacturers are buying more or fewer foreign materials—jumped to 54.9% last month, its highest level since early 2022, according to the Institute for Supply Management.
The surge was broad, with eight major industries—including wood products, chemicals, primary metals, transportation equipment, and computer electronics—reporting higher imports.
When paired with a massive spike in the Prices Index, which hit 70.5%, the data points to yet another wave of “front-loading” – this time in anticipation of price hikes due to the new Section 122 tariffs.
The “Invoice” Factor
Other data already released for February showed that price of goods entering the U.S. jumped 1.3% from the previous month—the largest monthly spike since March 2022—suggesting a broad price pickup even before the outbreak of war in the Middle East.
Importantly, these figures reflect prices set by foreign exporters before tariffs are applied. If Thursday’s report shows a higher growth for nominal imports compared to real imports, it would indicate that the U.S is “importing inflation”—not actually getting more goods, but paying more for the same volume.
A.I. Boom vs. Automotive Slump
Expect the gap between America’s surging tech imports and its declining automotive imports to grow wider. In January, imports of capital goods hit a record $110.7 billion, fueled by the hardware powering the artificial intelligence boom: computers, semiconductors, and servers.
At the same time, imports of automotive vehicles, parts, and engines dropped to $30.7 billion, their lowest level since February 2022. “Auto slump” is driven largely driven by the 25% tariffs Trump imposed last year under Section 232, which remain in effect.
Accordingly, this shift is essentially redrawing the map of American trade. States benefiting from A.I.-related investment show stronger trade momentum, with imports to Nevada and Arizona surging 92% and 36%, respectively, last year. Conversely, states more exposed to tariff-sensitive auto supply chains lag—like Michigan, Tennessee and California—recorded declines driven mainly by a slowdown in the automotive industry.
“Competition between AI-related imports and automotive imports bears close watching,” said Gary Hufbauer, senior fellow at the Peterson Institute for International Economics. “It’s a competition between the new economy and the old economy. The key question is how long before AI imports carry the day.”
One Year of “Liberation”
Beyond numbers, the report symbolically lands on April 2, marking the one-year anniversary of “Liberation Day” and effectively closing the book on an 11-month policy experiment defined by trade volatility. Yet, despite the disruptions, the U.S. trade deficit in goods hit a record $1.24 trillion last year, a 2% increase from 2024.
The primary legacy of the IEEPA era has been a dramatic fall in China’s share of U.S. imports. America’s top source of imports from 2007 to 2023, China is now back at early-2000s levels, with a 9% share. However, this shift doesn’t signal a clean break from Chinese production as the goods are now flowing into the U.S. through third-party countries, like Vietnam, Philippines, Taiwan, and India.