US imports racked up a record monthly high in December as companies rushed to secure products in advance of trade tariffs imposed by Donald Trump.
Official figures showed a 3.5% leap in imports compared to the previous month as the clock ticked down to Mr Trump‘s return to the White House on 20 January.
The Commerce Department recorded a sum of $364.9bn of total imports.
Exports fell by 2.6% on November to £266.5bn.
Money latest: UK interest rate cut almost certain
It meant that the US trade deficit – the value gap between imports and exports – hit its highest level since March 2022, the report said.
Import volumes have surged due to US companies’ efforts to avoid tariffs on goods they need, ranging from television sets and machinery to minerals and oils.
Mr Trump had threatened, in advance of taking office, to bring in immediate tariffs on all goods being shipped to the US in a bid to protect American jobs.
He later confined his immediate threats to China, Canada and Mexico.
To date, only products from China are subject to the additional tax.
Mr Trump agreed to pause 25% tariffs against his closest neighbours at the 11th hour following calls with his Mexican counterpart and Canada’s outgoing prime minister.
His arguments with both nations are not just restricted to trade but also flows of illegal drugs across the US border.
It remains to be seen whether the delays will result in a ceasefire but Mr Trump is widely expected to turn his tariff firepower towards the European Union, saying this week that the trading bloc will “definitely” face tariffs over its treatment of the US.
He has been less definite in his views on the UK but hinted that the country should avoid them.
When will Trump’s tariffs kick in?
Read more:
Why UK should escape Trump tariffs
Britain could do slimmed down trade deal with US within months
All the talk on tariffs since Mr Trump’s election victory was confirmed has been blamed for hitting economic sentiment globally.
The latest US data has shown that the world’s largest economy grew at a 2.3% annualised rate during the final three months of 2024.
That rate places it at the top of the G20 growth rankings.
While there are concerns that US import tariffs could force up domestic inflation, the fundamentals of the US economy are strong.
The same cannot be said for Europe where major economies such as Germany, which is in recession, France and the UK are all suffering from weak growth but for different reasons.
Manufacturing powerhouse Germany has lost its competitive edge since access to cheap Russian gas was ripped from its factories following the outbreak of the Russia-Ukraine war.
While France remains in a political vacuum that widely dented confidence, the cogs of the UK economy ground to a halt in the second half of last year when warnings from the new Labour government of black holes in the public finances and the need for a tough budget hit sentiment.
The threat of Trump trade tariffs has not helped either.
The fear is that a long period of global trade disruption will depress still further the chances of economic recovery.
