New federal data show the United States trade deficit changed little in 2025 while economic growth slowed sharply at the end of the year, challenging President Donald Trump’s claims about the impact of his tariff policies.
The Bureau of Economic Analysis reported that the overall goods-and-services trade deficit fell only 0.2% from 2024. The deficit in goods—the products most directly affected by Trump’s global tariffs—actually increased 2.1%.
Trump had claimed the trade deficit was down 78%. That figure referred to the difference between January and October 2025, when temporary swings in gold and pharmaceutical trade produced a short-lived decline. Full-year figures showed the gap later returned close to its previous level.
Tariff costs largely remain in the United States
The president has also said foreign countries pay the tariffs. In practice, U.S. importers make tariff payments and may pass part of the added cost to businesses and consumers. Studies cited by CNN found that American companies and households have absorbed most of the burden.
The Supreme Court struck down many of Trump’s tariffs on the day the GDP figures were released. Other duties remain in effect, and Trump said he intends to replace the invalidated measures using a different federal law.
Fourth-quarter growth falls short of claims
Separate government estimates showed real gross domestic product grew at an annualized rate of 1.4% in the fourth quarter of 2025, down from 4.4% in the previous quarter.
Trump had repeatedly cited projections suggesting growth of more than 5%, at one point describing a 5.6% rate as though it had already been achieved. The Atlanta Federal Reserve’s forecasting model had been revised down before those remarks, and the official result came in substantially lower.
The fall federal government shutdown contributed to the weak quarter. For the full year, the U.S. economy expanded 2.2%—slower than every year of the Biden administration and every year of Trump’s first term except the pandemic-hit year of 2020.
Source: CNN analysis, citing Bureau of Economic Analysis data. This article is an independently written summary.