The sharp downturn highlights the sudden shock to trade after companies had rushed to bring goods into the country earlier this year in an effort to beat the import taxes Trump had warned were coming. According to the Commerce Department, U.S. imports from major trade partners such as Canada and China fell to their lowest levels since 2021 and 2020, respectively. This collapse in imports led to a nearly 50% reduction in the U.S. goods trade deficit — the largest decline ever recorded. “The April trade report indicates the impact from tariffs has well and truly arrived,” said Oxford Economics, while cautioning that the figures should be interpreted carefully, given the earlier surge in trade activity.

Since returning to office in January, Trump has raised import duties on specific products such as foreign steel, aluminum, and automobiles, and imposed a blanket 10% tariff on most goods from global trading partners. Some countries were temporarily hit with even higher tariffs, though those measures were suspended for 90 days to allow room for negotiations.

Trump has defended the moves as necessary to revive domestic manufacturing and strengthen the U.S. position in trade talks. White House officials are currently engaged in high-level negotiations, racing to finalize agreements before the 90-day window closes next month.

On Thursday, President Trump and Chinese President Xi Jinping held a phone call aimed at salvaging the fragile trade truce between their countries. Trump later posted on social media that it had been a “very good phone call” focused on trade, and said both sides would meet again soon.

Chinese state media confirmed that the two leaders agreed to continue discussions and that President Xi had extended an invitation for Trump to visit. Analysts note that Trump’s sweeping tariff actions have driven U.S. effective tariff rates to their highest level since the 1930s. (BBC)