The U.S. Global Trade Deficit Remains High, Manufacturing Jobs Are Down, Industrial Growth Is Mixed
While on the campaign trail and in his presidential trade policy announcements since, Donald Trump has promised to lower the U.S. trade deficit with the goal of rebuilding American manufacturing and creating more American industrial jobs.
With trade and manufacturing data now available for the first full year of Trump’s second term, we can begin to see how his policies are affecting key trade and manufacturing indicators and measure outcomes against his April 2 “Liberation Day” tariff announcement promise that “jobs and factories will come roaring back into our country.”
The full-year 2025 trade data show very little change in the overall U.S. trade balance and in the goods trade balance comparing 2025 to 2024. However, the 2025 manufactured goods trade deficit was up $62 billion — 3.9% — compared to 2024. The United States lost 88,000 manufacturing jobs since Trump’s return to office. Other measures of manufacturing activity present a more varied picture: In the first half of 2025 all U.S. manufacturing indicators were in decline, and some measures remain negative, but others — particularly in the third and fourth quarters — point to strengthening conditions. Still, there is no evidence of Trump’s promised broad-based resurgence in U.S. manufacturing. (The data in this analysis are inflation-controlled, so some numbers may differ from what you see in the press.)
Total U.S. manufacturing employment declined to 12,585,000 employees in December 2025, according to the U.S. Bureau of Labor Statistics. This is down 88,000 jobs during the months Trump has been in office starting from a base of 12,673,000 employees at the end of January 2025. Manufacturing employment fell every month since reaching 12,693,000 employees in December 2024 to the current level, then increased by 5,000 jobs to 12,590,000 in January 2026 based on preliminary reports using unadjusted data.
Chart 1: Manufacturing Jobs
Manufactured goods imports increased significantly in the first quarter of 2025, reaching a monthly total of over $300 billion for the first time in March 2025 (inflation-adjusted), according to the U.S. Census Bureau. In the final quarter of 2025, manufactured goods imports were $717.5 billion. The 2025 manufactured goods trade deficit was 3.9% higher than in 2024.
Chart 2: Manufactured Goods Trade Deficit
The annual overall goods and services trade gap declined slightly to $914.3 billion in 2025 relative to $938.5 billion in 2024, a decrease of 2.6%, according to the U.S. Census Bureau. This reflects the goods balance remaining largely unchanged — the goods trade deficit declined $5.3 billion, a change of 0.4% — while the services surplus surged. Imports in Q1 2025 were $201.8 billion higher than in Q1 2024 (inflation-adjusted), while exports were only $19.3 billion higher in Q1 2025 than in Q1 2024. Imports fell considerably in the second half of the year while exports kept momentum. Quarter-by-quarter export trends saw Q2 at $865.4 billion, Q3 at $868.5 billion, and Q4 at $884.3 billion. In 2026, we will be watching quarterly trends to try to ascertain whether the large deficit increase in Q1 2025 was a one-time phenomenon related to importers trying to bring in inventory ahead of tariffs going into effect.
The ever-changing Trump tariff regime — combined with uncertainty related to a pending Supreme Court ruling on the legality of many current tariffs — makes it difficult to predict trends for the U.S. trade deficit in 2026. However, after many months of record-high tariffs, the Trump administration has not made meaningful progress in reducing the large U.S. trade gap with the world. (For instance, if one does not inflation-control the data, the nominal figure of the 2025 goods trade deficit appears to be larger than in 2024 while it is slightly smaller when inflation-controlled, showing how narrow the difference is.)
Chart 3: Goods and Services Trade Deficit
Chart 4: Imports and Exports
Chart 5: Goods Deficit
As has been the trend since 2019, a decline in imports from China is being swamped by growing imports from other countries. This resulted in a large U.S. trade deficit with the world in 2025, albeit 2.6% smaller relative to 2024. Chinese manufacturing investment in countries such as Vietnam and Mexico and strategies to ship goods through other countries has created workarounds for Chinese firms to reach U.S. markets. The United States imported more from ASEAN countries, Mexico, and Taiwan in the first 11 months of 2025 than the same period in 2024. Imports from Canada, China, and South Korea are down compared to the first 11 months of 2024. Imports from Ireland to the United States also increased in 2025, with large import spikes of pharmaceuticals.
Chart 6: Imports by Country
Durable goods shipments measure the dollar value of products designed to last three years or more sold by U.S. manufacturers. Growth in the U.S. Census Bureau’s “Manufacturers’ Shipments, Inventories, and Orders” data, specifically the “American Manufacturers’ Shipments for Durable Goods” data, can be considered an indicator of growth in manufacturing activity. Durable goods shipments have increased quarter-over-quarter from $905 billion in Q4 2024 to $911.9 billion in Q1 2025, $919.4 billion in Q2 2025, $931.1 billion in Q3 2025, and $931.5 billion in Q4 2025 — a total year-over-year increase of $46.3 billion, according to the U.S. Census Bureau. (Some analysts refer to New Orders in the manufacturing report to gauge economic activity. While these are interesting numbers, we believe shipments to provide a more accurate picture of U.S. manufacturing activity given new orders are based on intention to buy and may be canceled.)
The recent positive trend in durable goods shipments means that 2025 levels have nearly returned to the highs seen in 2022 and 2023. However, this indicator remains below the pre-pandemic peak of $962.9 billion recorded in Q4 2018 — the highest quarterly level since 2015. This suggests that manufacturing output has not risen significantly above its longer-term trend and that, overall, manufacturers have experienced stronger years over the past decade.
Chart 7: Durable Goods Shipments
While overall durable goods shipments increased this year, shipments of nondefense capital goods excluding aircraft decreased by $101 million in 2025 compared to 2024. This data cut captures both equipment and inputs/supply chain purchases, making it a good indicator of investment in productive capacity. These capital goods shipments have increased slightly each quarter since Q4 2024, reaching $235 billion in Q4 2025 with quarter-on-quarter growth of 1.4%. However, the level reached in 2025 is still below the higher value of these shipments attained during the Biden administration in early 2024.
Chart 8: Capital Goods Shipments
The U.S. manufacturing PMI has been steadily declining during the second Trump administration. A PMI above 50 points indicates the manufacturing economy is expanding while a PMI below 50 points indicates the manufacturing economy is declining. The index reached 50.9 points in January 2025, fell to 50.3 points in February, and declined further in March, April, and May 2025, according to Investing.com, which uses data from the Institute of Supply Management Report on Business. PMI hovered between 47.9 and 49.1 points from March to December 2025. Notably, the PMI for January 2026 jumped to 52.6. We will be closely watching the February and March figures to understand if this was a fluke or a new trend. Prior to 2025, the index was most recently over 50 points in March 2024.
Chart 9: PMI
After peaking at $243.5 billion (adjusted for inflation) in June 2024, U.S. construction spending in manufacturing declined to $215 billion in October 2025, according to the U.S. Census Bureau. Construction spending skyrocketed in 2022 and 2023 after the Infrastructure Investment and Jobs Act was signed into law in November 2021 and the Chips and Science Act and Inflation Reduction Act were signed into law in August 2022. Spending on manufacturing construction — including new factories and expanding or updating existing facilities — has fallen month-over-month each month since January, although it rose rapidly in 2022, hit the highest level in 30 years in 2023, and remains at historically high levels. (The Construction Spending report was delayed due to the government shutdown. Data for November and December 2025 are scheduled for release on February 27, 2026.)
The decline in this indicator, along with lower nondefense capital goods shipments, suggests that manufacturers have slowed or postponed investment projects, likely in response to uncertainty surrounding the volatile tariff outlook.
Chart 10: Construction Spending
No administration can quickly turn around decades of U.S. trade deficits and deindustrialization. But it is notable that some manufacturing indicators show worsening outcomes. Additionally, the 2025 manufactured goods trade deficit is up relative to 2024, and the overall goods trade deficit decreased only 0.4%. While, since April 2025, goods imports have declined slightly, likely due to the tariffs imposed by the Trump administration, the lack of certainty and stability on tariff rates and coverage likely are having a chilling effect on manufacturing activity and investment as is the termination of Inflation Reduction Act and CHIPS and Science Act industrial policy funding. As well, to date, the trade “agreements” the administration has announced do not include terms designed to change the underlying causes of surging imports from the countries that are the main source of the structural imbalance, meaning that these deals do not meet the criteria that would be beneficial in addressing the U.S. trade deficit and deindustrialization.
This page will be updated quarterly (timely release of government data allowing). These data will provide a look at the most important manufacturing indicators and trade and jobs data — including the manufactured goods trade balance — to measure real outcomes against the Trump administration’s promises.
Two trends we will carefully track for the first quarter of 2026: After a huge jump in the trade deficit in the first three months of Trump’s second term, in the three subsequent quarters, imports fell back to 2024 levels and in some instances dropped further, especially in June. Despite this, manufacturing indicators still do not show the desired revitalization of the sector, and U.S. manufacturing job loss has continued throughout 2025.