US trade deficit hit record in January, as growth fears loom large

The US trade deficit reached a record high in January, a sign that businesses were scrambling to secure goods from overseas before President Donald Trump’s threatened tariffs went into effect.

The total value of imports to the country increased 10%, while exports only rose 1.2%, leaving a $131 billion trade gap.

Trump has pushed tariffs as a means of reducing America’s trade deficit, which he has repeatedly criticized as being fundamentally unfair to the US, arguing instead that import duties would push more Americans to buy more from domestic manufacturers, which would also benefit from the increased demand.

But while the Trump administration has positioned tariffs as central to American economic strength, markets are increasingly wary about their impact: Analysts are growing worried that growth is slowing down, and even that the US could soon be in a recession — fears that have driven stock indexes down in recent weeks.

“One thing is essential for an economy and that’s confidence, which has taken a hit,” one investor told Reuters.