The latest U.S. trade report will offer an early read on how businesses are responding to Donald Trump’s tariffs, which continue to occupy the headlines.
Economists expect the trade deficit for goods and services to widen to a record-breaking $137 billion, with March figures showing that companies continued to stockpile goods ahead of tariffs.
As preliminary figures released last week show the U.S. economy shrank in the first quarter, tomorrow’s trade data from the U.S. Census Bureau and the Bureau of Economic Analysis will provide more insight into how consumers and businesses reacted to Trump’s threats prior to “Liberation Day.”
Here are five key signals to look for in Tuesday’s numbers:
1. It may sound obvious but these are March numbers–not post-tariff fallout
Trump’s so-called “Liberation Day,” when he announced a 10% universal tariff on foreign imports, didn’t arrive until April 2. That means Tuesday’s report offers a look in the rearview mirror. “What we see in those data are not a good indication of what we’re going to see a month from now,” said Claudia Sahm, the chief economist at New Century Advisors and a former Federal Reserve economist.
Though Trump floated new tariffs on Canada and Mexico throughout March, they were ultimately delayed or temporarily exempted. The only major measure that actually took effect during the month was a 25 percent tariff on steel and aluminum imports, imposed on March 12. Relatedly…
2. We may see another rush– or an incredible fall– for steel and aluminum
Get familiar with the term “front-loading” —you’re about to see it in action. Trump first announced his intent to tax foreign steel and aluminum goods in February, increasing the aluminum tariff from 10 to 25 percent and eliminating all country exceptions.
Interestingly, steel and aluminum imports fell in February following Trump’s announcement after hitting a significant peak the month before. Looking to March, imports could remain subdued with ongoing tariff uncertainty, or they could show a modest uptick due to suppliers racing the clock.
3. Did continued imports from China drive the record-breaking trade deficit?
If Trump wants to defeat China and eliminate the deficit, March’s data may show he’s having the opposite effect. Tuesday’s trade report will be key in assessing the ongoing impact of tariff policies and shifting global supply chains.
While tariffs were already in place against China, the anticipation of additional tariffs and the desire to stockpile inventory may have maintained high import levels for the month of March. January and February’s numbers may also be adjusted to more accurately reflect the continued surge from China, as the country has been slow in releasing trade data.
4. A surge in auto imports and exports
When looking at the March trade data, expect to see a notable surge in both automotive imports and exports, driven by companies rushing to move goods before the full impact of Trump’s trade policies. On March 5, President Trump announced a one-month exemption for tariffs on automobile imports from Mexico and Canada.
With this heads-up in place, automakers and suppliers likely ramped up shipments to avoid higher costs. On the export side, expect to see manufacturers offloading inventory in anticipation of future tariff barriers.
5. A last gasp for exports
March exports are expected to tick up slightly, but the gain may reflect a short-term push–not sustained global demand. From Tennessee whiskey to Vermont’s maple syrup, American companies tried to get their goods out the door ahead of tariffs. Preliminary data from the Census Bureau shows that goods exports rose $2.2 billion to $180.8 billion in March.
Trump may take credit for the March export increase that we’ll see from Tuesday’s trade data. However, this increase in exports leaving the country won’t last.
Today, U.S. ports are seeing such an extreme drop in exports that container ships are leaving the country empty. The ports of Los Angeles and Long Beach, which moved 20 million containers in 2024, are seeing a 44 percent decrease in dock vessels compared to last year. Front-loaded tariffs will only last so long. Empty ports and empty containers show a bleak future, not only for dock workers, but also American consumers in the months to come who may face empty shelves–a reality not well represented by the March trade report.
