U.S. Trade Deficit Grows, Supreme Court Strikes Down Trump Tariffs

Imports are up, exports are down, and American farmers, consumers, and companies are picking up the greatest share of the financial burden from President Donald Trump’s tariff policies. Can future trade deals and a stabilizing of the global market change those trends later in 2026?

The U.S. trade deficit grew sharply in December, according to the U.S. Commerce Department. The year finished roughly where it was compared to the previous year, despite the president’s frequently changing tariff policies with trade partners.

Bloomberg reported that the $901.5 billion trade deficit recorded in 2025 was among the largest in 65 years. The article quoted Nationwide Financial Market Economist Oren Klachkin who said, “After all the tariff headlines and swings in the data, the trade deficit barely budged in 2025.”

Klachkin added, “With the peak tariff drag now likely behind us, we expect trade to settle into a more predictable rhythm.”  

Trade Deficit by the numbers:

• Trade deficit for 2025: $901.5 billion

• Trade deficit for 2024: $903.6 billion

• Record trade deficit for 2022: $923.7 billion

“…the tariffs led to significant swings in trade flows, particularly in non-monetary gold and pharmaceutical products and also in automotive vehicles, parts and engines,” noted Thomas Kevin Smith, Managing Director at Swift Economic in Charlotte, North Carolina.

Meagan Martin-Schoenberger, KPMG Senior Economist, wrote, “Imports remained resilient, reflecting ongoing investment in technology and data center infrastructure. Export gains were more modest and reflected ongoing deals in the trade policy space; soybeans and semiconductors both gained.”

She summed up the trends reflected in the report like this: “Bottom Line: Supply-chain realignment takes time, as reflected by the fact that the deficit narrowed only marginally for the year 2025. In 2026, forces like AI-related capital spending are likely to keep imports elevated.

Richard Mordesovich, Sonova Private Wealth CEO & Founder in San Francisco, wrote, “The U.S. trade deficit widened under Republican/ Trump’s tariff strategy because tariffs acted as a tax on American consumers and businesses rather than on foreign exporters.”

Mordesovich pointed to the fallout from the tariffs and where costs are felt the most.

He wrote, “Independent analyses from the Congressional Budget Office and Federal Reserve found that U.S. importers paid over 90% of tariff costs, raising prices on inputs like steel, aluminum, and consumer goods. As costs rose, U.S. manufacturers became less competitive abroad, depressing exports, while strong domestic demand for higher-priced imported goods persisted—driving the deficit higher.”

Forbes pointed out that the 2025 numbers did not seem to reflect what President Trump had claimed earlier in the week and have not demonstrated the overall course correction that supporters had hoped so far.

“President Donald Trump claimed the U.S. trade deficit shrank by 78% because of his tariffs, but the trade gap widened more than expected in December after rebounding from a 16-year low and remained near a historical high last year,” Forbes reported. 

Supreme Court Rules Against Trump Tariffs

Friday morning, the U.S. Supreme Court ruled that President Trump lacked the constitutional authority to invoke the International Emergency Economic Powers Act to levy the tariffs without congressional authority.

Much of Trump’s economic plan – and promised benefits for Americans – hinged on his previously untested efforts to expand his authority to expand tariffs on his own. He floated the idea of sending rebate checks to Americans later this year (likely in the months before the November mid-term elections to make voters feel better about their economic well-being).

What happens to the additional tariffs that American companies have already paid now that the nation’s highest court ruled against Trump’s actions? What about American consumers who also shouldered much of the costs of higher import costs? What will the ruling mean for agricultural producers who paid more for inputs because of the tariffs and have waited to see if new trade deals can expand their markets?

There will be much to sort out in the months ahead.