US goods trade deficit hits all-time high in 2025—What does it mean for Q4 GDP?

US trade deficit continued to widen in December after hitting the smallest monthly amount since 2009 low in October. The total import was USD 70.3 billion higher than export in the last month of 2025, according to the US Census Bureau. 

Now we have a full picture of the accumulated trade balance in 2025: compared to 2024, full-year trade deficit for goods and services was merely USD 2.06 billion lower. The shortfall was unusually concentrated in the first half of the year as firms rushed to stock-up foreign products before the tariff policies hit. 

If we zoom in to just goods trade, accumulated good trade gap rose to USD 1,230 billion in 2025, from USD 1,204 billion in the previous year, reaching a new all-time high. 

What does these trade data mean for Q4 GDP

The December figures also give us a complete overview of Q4 net export contribution to economic growth. Now, to use translate trade numbers into GDP contributions, one of the most important adjustment these days is to first exclude non-monetary gold. This is because most of the cross border trade involving non-monetary gold involve no local production in the US; they are merely ownership transfer of investment assets which are not within GDP’s coverage. 

Removing non-monetary gold from trade data, the trade deficit for goods and services in December would rise to USD 73 billion. 

Take the average of the the month of ex-gold trade deficit in Q4 (shown in the red lines in the graph below), we can the number was very close to the level in Q3. This means we should expect a minimal contribution from net export in the Q4 GDP. 

This is also the same conclusion the Atlanta Fed’s GDPNow draws. The nowcasting tool degraded its Q4 GDP growth estimate to 3%, with the expected contribution from net export fell to merely 0.02 percentage points (pps), from 0.62 pps in the second most recent update.