The American trade deficit of goods reached a record level in March while companies rushed to store imports before the radical prices of Donald Trump, inciting economists to Wall Street to be expected that GDP decreased in the first quarter.
After the publication of official data showing a difference of $ 162 billion between imports and exports last month, Morgan Stanley, Goldman Sachs and JPMorgan predicted a production contraction in the first three months of the year. The balance between imports and exports is an important factor in calculating GDP.
The figure in the US census office was the highest goods deficit on the files chosen in the early 1990s and compared to $ 92.8 billion for March 2024.
The data reflected storage by companies in anticipation of Trump's “Liberation Day” prices, and released one day before Wednesday's first quarter GDP.
“The import overvoltage in front of the prices was even greater than what we expected, and the stocks did not compensate for it,” said Morgan Stanley economists. They added that consequently, they reduced their forecasts for the first quarter of zero to an annualized rate of -1.4%.
Goldman Sachs reduced his forecasts from -0.2 to -0.8%, JPMorgan economists, reducing their prediction from zero to -1.75%.
Increased trade The deficit was almost entirely due to an increase in imports – in particular those which have a long shelf life, such as cars, industrial materials and consumer goods.
“The photo for (the first quarter of 2025) remains on the whole that President Trump's pricing threats have been in a hurry to buy goods now rather than facing higher prices later, which caused a surprising push of imports,” said Oliver Allen, main American economist at Pantheon Macroeconomics.
Analysts had already planned a growth collapse, even before Tuesday's commercial figures, with a Reuters survey predicting an annualized quarterly rate of 0.3% – compared to 2.4% for the last three months of last year.
However, many analysts claim that Wednesday growth figures will be biased by the extraordinary period before prices take effect, when many companies have concentrated on storage and are likely to overvalue damage to the American economy.
“The GDP number will tell us very little,” said Isabelle Mateos y Lago, chief economist of BNP Paribas. “It will be full of noise and think to a very large extent, the sum of imports.”
She added: “You will need to really look under the hood to see what is really going on.”
“The data will be extremely noisy, both because the reality is noisy and the way we measure reality is noisy,” said Jason Furman, an economist at Harvard University, adding that he thought that the data would always show “a fairly positive story” for American consumption, which has motivated growth in recent years.
GDP can be calculated as the sum of the trade balance, the more consumption, investment and public spending.
Trump unveiled a series of so-called reciprocal rates on April 2, causing a high sale on equity markets and an increase in American government financing costs as investors at the risk of the samples stimulate US economy in the recession and global growth of waterfalls.
In recent weeks, concerns have shown that high prices on Chinese imports will trigger freight shortages in important sectors such as construction and industrial production.
Scott Bessent, American secretary of the Treasury, rejected the fears of the shock of the supply chain on Tuesday, affirming in a press conference that American retailers had “planned accordingly”.
He said that “the opening of uncertainty” would soon be “narrowed”, with Washington concluding a trade agreement with India.
The United States also had the “contours” of an agreement with South Korea and made good progress in talks with Japan, added Bessent.
While the introduction of many “reciprocal” prices was interrupted by Trump for 90 days on April 4, a basic line of 10% remains in place, as is a 145% levy on most Chinese imports.
Economists say that, even without the prices of April 2 in place, the current scenario leaves the American commercial levies at their highest effective rate for more than a century.
Bessent said on Tuesday that the trade war was not sustainable for China and that the “burden” was on Beijing to reduce trade barriers.
Economists expect a partial reversal in the second quarter as imports fall and push GDP.
West coast ports like Los Angeles have reported a sharp drop in freight volumes in recent weeks, among the panel ships carrying products from the east coast of China.
“Today's (commercial) figures really highlight the risk that it is indeed a negative GDP print and which obviously prepares us for a very low 2025,” said James Knightley, international economist at ING Bank.
“This is a big storage effort to get ahead of prices … But we expect it to relax very soon: the data from the ports are already slowing down.”
Additional George Steer report in New York
