The latest data released by the US Department of Commerce on Thursday (February 19) indicates that due to the massive tariff policies and global trade reconfigurations by the current administration, the annual trade deficit between the United States and China shrank to approximately $202.1 billion in 2025, marking the lowest record since 2002.
However, simultaneously, trade deficits with Mexico, Vietnam, and Taiwan have significantly expanded, particularly driven by the semiconductor and electronic products sectors, with Taiwan’s deficit nearly doubling.
According to analysis by Bloomberg, 2025 was a year of drastic changes in the global trade landscape. As the United States adopts strategies to reduce reliance on foreign goods and encourages domestic investment, the effective tariff rate on imported goods has reached 13.6%, the highest level since the 1940s.
Against this backdrop, the trade deficit with China saw a significant decline, while deficits with Mexico and Vietnam reached historic highs.
Overall, in 2025, the US trade deficit with China decreased by $93.4 billion to $202.1 billion. Exports dropped by $36.9 billion to $106.3 billion, and imports decreased by $130.4 billion to $308.4 billion.
Analysts suggest that this reflects a shift in some trade routes, with existing supply chains moving to third-party countries before being re-imported into the US. Vietnam’s performance stands out, with the US trade deficit increasing by $54.7 billion in 2025, reaching a historic high of $178.2 billion.
Among major trading partners, Taiwan and Canada exhibit starkly different trends.
Taiwan has benefited from explosive demand for semiconductor and electronic products driven by AI development, with certain exported products enjoying specific tariff exemptions. The US trade deficit with Taiwan increased by $73 billion in 2025, reaching $146.8 billion, nearly doubling compared to previous years.
In contrast, despite the protection offered by the US-Mexico-Canada Agreement (USMCA), the US trade deficit with Canada narrowed significantly to $46.4 billion.
Bloomberg attributes this mainly to disruptions in shipping logistics during the trade reshuffling process. Additionally, as the US improves its energy self-sufficiency and implements specific tariff restrictions (such as steel and aluminum tariffs), coupled with Canada actively shifting its export focus to non-US markets, this trend has been bolstered.
Data provided by the Bureau of Economic Analysis (BEA) and the Census Bureau shows that the total goods and services trade deficit in 2025 was $901.5 billion, a slight decrease of about $2.1 billion from 2024, representing a 0.2% decline.
It is noteworthy that services trade played a crucial role in this. Although the US goods trade deficit actually expanded by $25.5 billion (2.1%) in 2025, robust growth in services trade surplus by $27.6 billion (8.9%) to reach $339.5 billion effectively offset the increase in goods deficit.
In terms of performance by category, US exports grew by 6.2% in 2025, reaching $3,432.3 billion. Strongest growth was seen in capital goods (such as computers, civil aircraft, and parts), as well as industrial supplies (such as non-monetary gold and natural gas).
Imports for the year increased by 4.8% to reach $4,333.8 billion. Imports of capital goods, such as computers and peripheral equipment, and telecommunications equipment saw significant increases, offsetting the decline in passenger vehicles and crude oil imports.
Looking specifically at December 2025, the monthly trade deficit increased by $17.3 billion to $70.3 billion, a 32.6% increase. This increase was mainly due to a rise in imports (especially computer parts and telecommunications equipment), while exports declined due to reduced shipments of non-monetary gold.
It is worth noting that this important economic report was initially scheduled for earlier release but was delayed due to a recent federal government funding shortage leading to some government agencies’ shutdown, thus delaying related statistical and publishing operations.
Officials from the Department of Commerce stated that they are currently working with data suppliers to update the release schedule for subsequent affected data.