Imports Boost US Goods Trade Deficit To Record High As Tariffs Loom

• The U.S. trade deficit in goods widened to a record high in December, likely as businesses front-loaded imports of industrial supplies and consumer goods in anticipation of broad tariffs from President Donald Trump's new administration.
• The deterioration in the goods trade deficit reported by the Commerce Department on Wednesday raises the risk of a sharper slowdown in gross domestic product growth in the fourth quarter than economists had anticipated.
• A wider trade deficit as a result of an influx of imports is usually offset by a rise in inventories in the calculation of GDP. The government is scheduled to publish its advance estimate of fourth-quarter GDP on Thursday.
• The goods trade gap increased 18.0% to $122.1Bn last month, the largest since the government started tracking the series in 1992, the Commerce Department's Census Bureau said. Goods imports increased $10.8 billion, or 3.9%, to $289.6 billion. Exports fell $7.8Bn, or 4.5% to $167.5Bn.
• Trade has subtracted from GDP for three straight quarters. Still, the anticipated drag from trade in the October-December quarter was likely more than offset by strong consumer spending, which is keeping the economic expansion on track, thanks to a resilient labor market.

(Source: Reuters)