Scott Lincicome and Chad Smitson
More than a year since “Liberation Day,” the US trade deficit looks much the same—despite a historic increase in tariffs that were ostensibly intended to reduce it.
As we’ve previously discussed, most economists think that the trade deficit—especially the deficit for just goods—isn’t necessarily a problem for the United States and, being driven by big macroeconomic forces, won’t be fundamentally altered by tariffs alone.
Nevertheless, the trade in goods deficit has been a major focus of President Trump’s ongoing tariff onslaught, and it’s therefore something we (reluctantly) need to monitor. Yesterday, US Census / Bureau of Economic Analysis released the April 2026 trade balance data, giving us a full year to test the president’s experiment. The data show little for the president to crow about—especially after accounting for pre-tariff import stockpiling and trade flows unrelated to tariffs (i.e., surging petroleum exports due to the Iran war and anomalous trade in non-monetary gold).
Figure 1 shows that, after adjusting for inflation, the US trade in goods deficit for April of this year was roughly at pre-tariff (2022–24) levels—and even larger after accounting for the aforementioned petroleum trade:
As we can see in Figure 2, moreover, substantial exports of non-monetary gold have recently cut billions from the nominal monthly trade deficit figures: almost $10 billion in April and even more in February and March. (The Census Bureau doesn’t provide the real figures with a gold breakout.) Since April of 2025, in fact, trade in nonmonetary gold—exports and imports—has collectively reduced the nominal US trade deficit by more than $100 billion.
To repeat, most economists will tell you that the trade deficit is an inappropriate economic barometer and one that tariffs can’t change, regardless. The latest data appear to have proven them correct.
