The U.S. trade deficit plummeted to its lowest level since mid-2009, a sharp and unexpected pullback fueled by a drop in imports while President Donald Trump's tariffs took hold, official data showed on Thursday.
The overall trade gap plunged 39% to $29.4 billion in October, the lowest level since June 2009, said the Department of Commerce, as imports dropped by 3.2%.
The deficit was significantly smaller than a $58.4 billion median forecast from surveys of economists by Dow Jones Newswires and The Wall Street Journal.
The release of the trade data was delayed by more than a month due to a lengthy government shutdown last year, depriving officials and companies of updated figures as they assess the health of the world's biggest economy.
While U.S. exports rose by $7.8 billion in October to $302 billion, imports dropped by $11 billion to $331.4 billion.
This was largely due to a tumble in goods imports. In particular, consumer goods declined $14 billion and within the category, pharmaceutical preparations fell sharply, the Commerce Department said.
Imports of industrial supplies and materials like non-monetary gold also dropped.
KPMG senior economist Meagan Schoenberger noted that non-monetary gold accounted for a significant portion of the export rise and a minor part of the import decline.
"The run-up in gold in 2025 has clouded the trade picture and during the month of October made the trade deficit look narrower than the remainder of the product mixture implies," she said in a note.
But outside of that, "the main contributors to declining imports were pharmaceuticals, which fell $14.3 billion alone," Schoenberger added.
The sector has been very volatile since firms stocked up in early 2025, and could have been impacted by October trade policy announcements.
"Other areas that showed small declines included auto parts, oil and natural gas and fruits and vegetables," she said.
Meanwhile, "imports of high-tech capital goods continued their upward march given tariff waivers for the industry and the build-out of data centers to feed AI demand," she added.
The figures underscore how, since returning to the presidency last year, Trump's fast-changing and sweeping tariff policies have swayed trade flows.
As the U.S. leader unveiled wide-ranging tariffs on imports from various trading partners, businesses in the country rushed to stock up on inventory ahead of planned hikes in duties.
This has allowed many firms to avoid passing on the full cost of tariffs to consumers, at least for now.
As U.S. households grapple with cost-of-living worries, Trump has more recently broadened the range of goods exempted from certain tariffs – covering key agriculture imports. But many of these exemptions were due to take effect in November.
As of mid-November, The Budget Lab at Yale University estimated that consumers face an overall average effective tariff rate that is the highest since the 1930s.
The U.S. trade deficit was $48.1 billion in September.
Although Trump's tariffs have influenced trade flows this year, a large swath of them also face legal challenges.
In particular, the Supreme Court is due to rule on the legality of tariffs imposed using the International Emergency Economic Powers Act, after hearing arguments in November.
If the conservative-majority high court were to rule that the president overstepped his authority in imposing these duties, it could temporarily hit many country-specific tariffs – although not sector-specific ones.
