U.S. March Trade Deficit Record High…Concerns Of First Quarter Negative Growth Due To Trump Tariff Policy

Donald Trump President Of The United States (Source: AP)

As the United States March goods trade deficit recorded an all-time high, concerns are growing that the Trump administration's tariff policy is negatively affecting the economy. It is analyzed that companies rushed to secure inventories ahead of the implementation of tariffs, leading to a surge in imports, which directly hit the Gross Domestic Product (GDP).

On the 29th, the United States Department of Commerce announced that the March goods trade deficit increased by 9.6% month-on-month to $162 billion (about 231 trillion won). This is the largest scale since the statistics were compiled. During the same period, exports increased by 1.2% to $180.8 billion, while imports increased by 5% to record an all-time high of $342.7 billion. In particular, imports of consumer goods surged by 27.5% in just one month.

In the market, there is an evaluation that President Trump's tariff policy rather aggravated the trade deficit. It is said that tariffs, which aimed to resolve the trade deficit, had the opposite effect by stimulating companies' import demand in the short term. Some interpret that gold imports have been one of the reasons for the increase in the deficit since the beginning of the year.

Consumer sentiment also declined together. The Consumer Confidence Index for April, announced by the economic research institute Conference Board, fell by 7.9 points from the previous month to 86.0. This is the lowest level since May 2020. In particular, the 'Expectations Index,' which indicates future economic prospects, was 54.4, the lowest since October 2011. Consumers judged that uncertainty about income, jobs, and the economy had increased, and tariff policy was cited as one of the reasons.

The labor market also shows signs of slowing down. According to the March Job Openings And Labor Turnover Survey (JOLTs) announced by the United States Department of Labor, the seasonally adjusted number of job openings was 7.192 million, below the market expectation of 7.48 million. However, the number of layoffs showed a declining trend.

As these economic indicators continue to deteriorate, major investment banks on Wall Street collectively revised down their first-quarter GDP growth forecasts. Morgan Stanley lowered its forecast from 0% to -1.4%, JP Morgan to -1.75%, and Goldman Sachs to -0.8%. This is a sharp slowdown compared to the growth rate of the fourth quarter of last year (+2.4%), and if actual negative growth is confirmed, it will be the first time since the first quarter of 2022.