Despite tariffs, US merchandise imports increased and exports held steady in the first half of 2025

When President Donald Trump launched his trade war, some economists predicted that US imports would decline significantly. So far, at least, that has not happened, according to data through July 2025 presented here. But individual exporting countries that were special targets, notably China, have been hit.

These findings may disappoint the Trump tariff team, but they will come as no surprise to macroeconomists who view the balance between national expenditure and national production as the principal determinant of the foreign trade balance. In addition, exports to the US may have surged because firms anticipated they would be hit once tariffs threatened by Trump kicked in. Meanwhile, foreign retaliation against US merchandise exports seems barely noticeable.

As figure 1 shows, the cumulative US merchandise trade deficit rose in 2025 compared with 2024, reflecting a growing excess of national expenditure over national production.

Two-way trade with disfavored China has significantly declined, however. US exports to the UK have sharply increased. US imports from Japan have fared relatively well, despite higher tariff revenue of 14.3 percent collected on imports between January and July 2025. In the face of hostile rhetoric, tariff revenue of 8.9 percent was collected on imports from the EU, but two-way trade with the EU has not suffered. For now, the same is true of US two-way trade with its principal partners, Mexico and Canada. As of July, tariff revenue collected from imports from Mexico amounted to about 4.7 percent, while tariff revenue collected on imports from Canada were even lower at 2.9 percent. Two-way trade flows with other countries, mostly subject to Trump’s universal 10 percent tariff, are holding up.

Of course, specific products that are targeted by Trump or by trading partner retaliatory actions would reveal much sharper shifts in imports and exports. For example, US soybean exports to China have vanished. So have US imports of low-value (“de minimis”) parcels. US exports of liquefied natural gas are up 22 percent. Those are stories to be explored in future postings.

This blog presents a snapshot through July 2025 of developments in US merchandise trade. We intend to update it when full year 2025 data are reported.

The Trump administration’s tariff agenda has probably suppressed the total amount spent on US imports of merchandise. But other forces are also at work, notably the US fiscal balance, anticipatory purchases, and global inflation. Figure 1 shows 2025 cumulative monthly merchandise import values through July, adjusted for inflation, relative to January-July 2024. While not shown in figure 1, real US imports from the world sharply increased in early 2025. In January-March 2025, cumulative imports peaked in value around 25 percent above the January-March 2024 level. Anticipation of Trump’s tariffs probably had a big impact by encouraging importers to speed up purchases before the tariffs took effect. By July 2025, as tariffs were enforced, January-July 2025 cumulative real imports were still about 10 percent above the January-July 2024 level.

In real terms, cumulative exports in January-July 2025 remained about the same as their levels in the same period in 2024 (figure 1). While US exports have not increased much, retaliatory tariffs abroad have so far been limited in their impact.

Figure 1 also shows the January-July 2024 and 2025 cumulative merchandise trade balances (adjusted for inflation). Because of the aforementioned frontloading of goods earlier this year and a healthy US economy, the combination of stronger imports and flat exports deepened the trade deficit in real terms at $871 billion compared with the 2024 level of $705 billion.

Figures 2 and 3 show the breakdown of US cumulative merchandise trade by key trading partners. Comparisons are based on the ratio of the inflation-adjusted cumulative trade values for 2025 (January-July) relative to 2024 (January-July). 

US imports by trading partner

Figure 2 portrays 2025 cumulative US monthly imports, relative to 2024, from major partners. The 2025 figures are adjusted for year-to-year inflation. While not shown in figure 2, US imports from several countries were sharply higher in early 2025 than in 2024. Anticipatory purchases were an important reason. Imports from the EU, Japan, and Mexico were probably all buoyed by anticipatory purchases.

But the good times for importers and consumers peaked in March 2025. By July 2025, cumulative merchandise imports from several major partners (adjusted for inflation) were approaching their July 2024 levels. US imports from the EU were still well above  their 2024 levels, up 14.3 percent, possibly because US tariff rhetoric was more hostile than tariff reality, while imports from China were well below their 2024 level, down 16.9 percent, because US tariff reality was stark.

US exports by trading partner

As shown in figure 3, real US merchandise exports to several major trading partners were running at similar levels in January-July 2025 compared with 2024. However, real exports to the EU were 11.3 percent above 2024 levels, while real exports to China were well below. In addition, real exports to the UK surged by 19.4 percent as 2025 progressed, possibly owing to the US-UK deal reached in May 2025. The deal may include lower UK tariffs on US beef, some US imports of British cars at reduced or zero tariff rates, and a preferential US tariff on imports of certain Section 232 (“national security”) goods such as steel and aluminum.

In sum, the effect of Trump’s tariffs can be seen more on the source country of US imports than on the aggregate level. The prospect of tariffs appears to have prompted an anticipatory spurt of imports in the early months of 2025 and a relative decline as the year progressed. Some trading partners fared much worse than others. Meanwhile, foreign retaliation seems barely noticeable against total US merchandise exports.