US imports plunge record 19.8% after Trump tariffs disrupt trade

US imports plunge record 19.8% after Trump tariffs disrupt trade

US goods imports plummeted nearly 20% in April — the steepest monthly decline since records began in 1992 — as businesses abruptly cut back on foreign purchases following President Donald Trump’s new wave of tariffs. According to data released by the US Census Bureau on Friday, imports fell to $276.1 billion, down 19.8% from March.

The sharp drop came on the heels of Trump’s April 2 announcement of sweeping tariffs, dubbed “liberation day” levies, which spurred a rush by companies to stock up on goods in March before the trade barriers took effect. The resulting whiplash in trade activity has upended US economic readings and fuelled instability across markets, the Financial Times reported.

Consumer and industrial imports collapse

Consumer goods imports suffered the heaviest blow, falling 32% to $69.6 billion. Industrial supplies dropped 31% to $51.8 billion, while automotive imports declined 19% to $33.6 billion. The slowdown in imports has been compounded by weakening domestic demand, as consumer spending growth slowed from 0.7% in March to just 0.2% in April, according to the Bureau of Economic Analysis.

The disarray in trade flows has distorted US GDP figures. The pre-tariff import surge contributed to a 0.2% annualized GDP contraction in the first quarter — the first negative quarter since 2022. But the April import collapse could ironically boost second-quarter figures, as lower imports improve net trade contributions.

GDP outlook revised upward, but uncertainty remains

The Atlanta Federal Reserve revised its forecast for second-quarter GDP growth sharply upward on Friday, from 2.2% to 3.8%. JPMorgan echoed that optimism, raising its forecast to 4%. However, the bank warned that “swings in trade volumes may be making it difficult to measure underlying growth,” and predicted average growth of 2% for the first half of the year.

Despite the apparent boost in growth metrics, economists cautioned that the underlying volatility masks a broader slowdown in business confidence and consumer resilience.

Tariff confusion and legal challenges mount

US importers are now grappling with a complex patchwork of tariffs — including sweeping 10% duties on most imports and elevated rates on Chinese goods — that have shifted multiple times in recent months, fuelling uncertainty.

While Trump agreed to a temporary reduction in tariffs on Chinese imports earlier this month, tensions reignited Friday after the president accused Beijing on Truth Social of having “TOTALLY VIOLATED ITS AGREEMENT WITH US.”

Complicating matters further, a US trade court ruled Wednesday that Trump’s “liberation day” tariff plan was illegal. But an appeals court quickly paused that ruling, allowing the tariffs to remain in place pending a government challenge.

Structural risks to trade and growth

The wild swings in trade are raising concerns about deeper structural risks. JPMorgan analysts noted that the volatility “makes it harder for businesses to plan,” while some economists worry that prolonged disruption could chill investment and hiring in trade-reliant sectors.

As the administration weighs its next steps, the effects of its trade policies continue to ripple across the economy — with bond markets, consumer behaviour, and corporate balance sheets all caught in the crossfire.