[Text/Observer Network Wang Yi] The impact of US President Trump's tariff policy has begun to show, with the decline in both the value of US imports and the trade deficit for goods and services in April setting record monthly declines since records began.

On local time June 5, data released by the US Department of Commerce showed that the value of US imports fell by 16.3% month-on-month to $351 billion in April. As a result, the trade deficit for goods and services also dropped to $6.16 billion, reaching its lowest level since September 2023. The US Department of Commerce stated that this was the largest monthly decline on record for import values and the trade deficit.

In detail, the total value of US imports for goods and services fell by 16.3% month-on-month to $351 billion in April, marking the largest historical decrease. Due to a drop of $2.6 billion in pharmaceutical imports, overall consumer goods imports decreased by 32% to $69.9 billion. Imports of industrial supplies and materials, as well as automotive parts, also plummeted sharply.

The volume of goods imported from most major trading partners decreased. In April, imports from the EU fell by more than $2.9 billion, imports from Canada and Mexico each declined by over $600 million, and imports from China decreased by $4 billion. The US Department of Commerce said that imports from Canada and China fell to their lowest levels since 2021 and 2020, respectively.

The New York Times noted that the 16.3% drop in imports compared to March was largely due to the fact that US importers had imported large quantities of goods into the country ahead of Trump's tariff threats at the beginning of the year. With Trump officially announcing the imposition of tariffs on all trading partners in early April, imports began to dry up and reversed economic data.

On the other hand, exports of goods and services increased by 3% to a record $28.94 billion. The Wall Street Journal analyzed that this might be due to foreign companies starting to purchase American products under the threat of Trump's tariffs.

Trend of changes in the US trade deficit for goods and services from 2020 to April 2025. Chart by the New York Times.

The combined effect of declining imports and rising exports caused the US trade deficit to shrink nearly in half, reaching a new low. Data shows that the seasonally adjusted trade deficit for goods and services narrowed to $6.16 billion in April, down 55% from the $13.83 billion figure in March.

The Wall Street Journal pointed out that, in dollar terms, this decline was the largest monthly change in the trade deficit for goods and services since 1992; in percentage terms, it was second only to the 59% drop in February 1992.

Joe Brusuelas, chief economist at RSM accounting firm, said that such fluctuations usually only occur "in cases of extreme policy chaos."

On April 2, Trump announced a "minimum base tariff" of 10% on trading partners and imposed higher "reciprocal tariffs" on some partners. A week later, he announced a 90-day suspension of the "reciprocal tariffs" on certain countries, and in May, he suspended the disproportionately high tariffs imposed on China.

"The significant fluctuation in the trade deficit reflects the impact of the global trade war," Mark Zandi, chief economist at Moody's Analytics, analyzed, "Due to the tariff measures, commodity imports plunged in April, leading to a substantial reduction in the trade deficit."

A reduction in the trade deficit has been a goal pursued by the Trump administration, which aims to encourage foreign countries to buy more American goods and services rather than vice versa. For Trump and his advisors, a trade imbalance indicates excessive US imports, requiring more domestic production in American factories to promote the US economy and strengthen national security.

Although the trade deficit data for April appears to be good news, most economists believe this data should be "interpreted cautiously."

"The deficit itself implies bad things, but in this case, the situation is more subtle," Elizabeth Renter, senior economist at the website NerdWallet, said, "International trade has generally been beneficial to the US economy—importing more than exporting benefits Americans overall. Therefore, when the trade deficit narrows, we should be cautious not to interpret it as entirely positive news."

Zandi also said that although a reduction in the trade deficit may have a positive impact on US GDP in the second quarter because the subtracted trade deficit data becomes smaller, this does not mean that tariffs will not negatively affect US consumers and the overall economy.

Zandi added that the tariffs imposed by the US have severely disrupted global trade, and this disruption will soon manifest in price increases for many goods purchased by Americans, significantly affecting their purchasing power and spending, thereby impacting the US economy.

On June 3, the Organization for Economic Cooperation and Development (OECD) downgraded its forecast for US GDP growth this year from 2.2% in March to 1.6%. Additionally, while the OECD lowered its overall inflation forecast for G20 countries this year, it raised its inflation forecast for the US, expecting the overall inflation rate this year to rise to 3.2%, higher than the 2.8% predicted in March.

Patrick Anderson, CEO of the US research institute Anderson Economic Group, analyzed that the tariffs imposed by Trump in April on the auto industry led to a decline of billions of dollars in the import and export of automobiles and their components, causing harm to workers in logistics, manufacturing, and retail industries. Although the sharp reduction in the trade deficit seems like good news, it actually means a decrease in economic activity and employment.

"Tariff policies are like a hammer, directly striking the anvil of the US economy," Anderson said.

This article is an exclusive piece by the Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7512660782124106251/

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