US Trade Deficit Widens to a Record on Pre-Tariff Drug Imports

(Bloomberg) —

The US trade deficit widened to a record in March as companies rushed to import products including pharmaceuticals as the Trump administration readied sweeping tariffs.

The goods and services trade gap grew 14% from the prior month to $140.5 billion, Commerce Department data showed Tuesday. The median estimate in a Bloomberg survey of economists was for a $137.2 billion deficit.

Imports of consumer goods climbed by the most on record, primarily due to the largest-ever inflow of pharmaceutical preparations. Imports of capital equipment and motor vehicles also increased.

The report illustrates what was likely the final push by US companies to secure goods before President Donald Trump announced expansive duties on April 2. While drug imports were excluded, the president has said a decision on pharmaceutical tariffs will be made in the coming weeks.

The dramatic widening of the trade deficit in the first quarter was the key reason the economy contracted for the first time since 2022. Gross domestic product fell an annualized 0.3% in the January-March period, with net exports subtracting nearly 5 percentage points — the most on record.

The value of all imports to the US jumped 4.4% to a record, while exports edged up just 0.2%.

However, Bloomberg Economics sees the import surge from tariff front-running easing, based on a drop in container shipping from China to the US since April 16. As the trade deficit narrows, it will probably support a near-term rebound in economic growth.

Survey data from the Institute for Supply Management showing declining imports by manufacturers and services providers also suggest the strategy of rushing in imports ahead of tariffs is drawing to a close.

Trump is seeking fairness in bilateral commerce, with the aim of encouraging foreign investment in the US, bolstering domestic production and shoring up national industrial security. He also see duties as a means to raise revenue for the government.

The March report showed the goods-trade deficit with Ireland surged to $29.3 billion on a seasonally adjusted basis. US drug companies, including Eli Lilly & Co. and Pfizer Inc., operate nearly two dozen factories in Ireland that ship to the US, according to a TD Cowen analysis. US imports of pharmaceutical preparations jumped 71% in March to a record $50.4 billion.

The shortfall with Canada narrowed, while the deficit with Mexico remained near the record reached in February. The goods-trade deficit with China shrank.

On an inflation-adjusted basis, the total US merchandise trade deficit widened to a record $150.9 billion in March.

© 2025 Bloomberg L.P.

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