U.S. Imports Plunged in April as Trump Infers Deal is Reached with China

 

The U.S. government released the official data for trade numbers, imports, and exports, for April confirming what port officials said that volumes were plunging due to the tariffs but it also created a record decline in the U.S. trade deficit. The data came as Donald Trump spoke with China’s leader Xi Jinping and later told reporters both sides were going on the terms of a trade deal.

Trump launched the trade war and tariffs to close the U.S. trade deficit and the numbers for April show the first effects. The U.S. trade deficit was down by half to $61.6 billion, the lowest in 19 months. The good trade deficit was down by more than 46 percent to $87.4 billion. 

Analysts highlighted that shippers had rushed to move goods, especially imports into the U.S. in the first quarter to get ahead of the tariffs, a point that was confirmed by major ports which reported strong volumes. However, in April and May ports such as Los Angeles reported volumes were dropping quickly reaching a level 30 percent below 2024 levels.

The U.S. government data confirmed this with imports off more than 16 percent in April and specifically goods off nearly 20 percent. The data showed a $3.5 billion decline in the imports of household goods including cellphones and other electronics. Industrial supplies and materials were also off dramatically ($23 billion) as well as growing declines in vehicles, parts, and engines. 

A positive note for ports and the economy is that good exports grew to a record $190 billion in April. This included industrial supplies, materials, finished metals, and crude oil.

Speaking with reports in the Oval Office later on Thursday, Trump said he had a good call with China’s leader about trade and that both sides were reviewing the terms of an agreement. He said “We have a deal,” but that is being interpreted to mean the agreement which delayed the tariffs of talks as China in its official readout said more talks would follow. Trump said reciprocal invitations had been extended and that he and Xi Jinping would be visiting each other in the future.

All of this came as Alphaliner reported today that volumes through the Panama Canal were at all-time highs in the first five months of the year. Its analysis shows that containership traffic set a record with over 1,200 crossings in both directions of the canal. It said this is up 10 percent year-over-year and four percent over the previous best in 2022. Alphaliner said the increase was driven by smaller, Neo Sub-Panamax vessels (7,500 to 10,000 TEU).

Analysts have speculated without the announcement of a formal trade deal between the U.S. and China shippers would rush volumes into the United States during the previously announced 90-day pause. Carriers were reported to already be repositioning vessels to meet demand from China. This comes after the U.S. ports said that they were seeing the first large numbers of blanked sailings for May and June since the early days of the pandemic in 2020.