The trade deficit, the difference between how much the U.S. sells and buys internationally, reached a record $74.4 billion in March, according to Commerce Department data released Tuesday.
The 5.6 percent increase over February continues a steady trend of record-breaking deficits as the U.S. economy awakens from the COVID-19 pandemic, even as much of the world remains mired in restrictions amid outbreaks, slow vaccine rollouts, and limited vaccine supply.
The overall level of trade increased for the month, with both imports and exports rising notably. But the $16.4 billion in additional imports outpaced the $12.4 billion growth in exports.
The largest bilateral trade deficit was with China, which jumped 11.6 percent to $27.7 billion.
Trade deficits became a hot-button political issue in the 2016 election when then-candidate Donald Trump regularly impugned them as a sign of the U.S. being on the “losing” side of its trade war.
But Trump’s aggressive trade policies, which sparked trade wars with allies and economic rivals alike, failed to stem the deficit, which continued rising throughout his presidency.
Economists note that deficits are not inherently good or bad, and are linked to a slew of economic dynamics such as relative economic strength, currency fluctuations, and the levels of savings and borrowing.
President Biden has moved to ease a handful of Trump’s trade restrictions with the EU and UK in order to set the tone for negotiated solutions over long-standing trade disputes.
But he has not taken unilateral steps to undo many of the Trump tariffs, looking instead to de-escalate through negotiations.
U.S. Trade Representative Katherine Tai has also made clear that the Biden administration would support some protectionist policies to shore up key industries, such as steel.