The U.S. trade deficit widened in February as a rebound in imports more than offset a surge in exports that reached record highs, adding to concerns that trade could weigh on economic growth in the first quarter of 2026. The overall trade gap increased 4.9% to $57.3 billion, compared with a revised $54.7 billion in January. Even with the larger deficit, the result was somewhat better than economists had expected.
The report shows an economy still moving large volumes of goods and services across borders, but with imports growing fast enough to more than cancel out the export gains. Total imports rose 4.3% to $372.1 billion in February. Goods imports increased 5.0% to $291.5 billion, driven in part by a $7.8 billion jump in capital goods imports, especially computers, computer accessories and semiconductors. Those purchases are likely tied to artificial intelligence investment and the construction of data centers, suggesting that part of the import growth reflects continued spending on advanced technology infrastructure rather than a simple rise in consumer demand.
Other import categories also moved higher. Imports of industrial supplies and materials rose $3.1 billion, largely because of crude oil. Consumer goods imports increased $2.2 billion, helped by a $1.0 billion rise in pharmaceutical preparations. Imports of automotive vehicles, parts and engines were up $1.6 billion. Together, those gains show that February’s widening deficit was broad-based, with growth spread across energy, healthcare-related goods, technology inputs and autos.
Exports, however, were also very strong. Total exports jumped 4.2% to a record $314.8 billion, while goods exports climbed 5.9% to an all-time high of $206.9 billion. Exports of industrial supplies and materials increased $10.2 billion to a record level, driven by monetary gold and natural gas. Non-petroleum goods exports also reached a record. On the services side, exports rose $1.1 billion to an all-time high of $107.9 billion, with increases in travel, business services, financial services and fees tied to intellectual property.
Despite that export strength, the goods side of the trade balance remained a drag. The goods trade deficit widened 3.0% to $84.6 billion in February. Adjusted for inflation, the goods deficit increased 0.6% to $83.5 billion. Trade had already subtracted from U.S. gross domestic product growth in the fourth quarter, and that the Atlanta Federal Reserve is forecasting the economy to grow at a 1.9% annualized rate in the first quarter after expanding at only 0.7% in the fourth quarter. That does not prove trade alone will weaken growth, but it does suggest the external sector remains a headwind.
The Bureau of Economic Analysis and Census Bureau are still catching up on releases after last year’s government shutdown, making recent trade data more volatile. It also noted that policy has been shifting: the U.S. Supreme Court struck down President Donald Trump’s broad tariffs in February, after which Trump imposed a global tariff for up to 150 days. However, Trump has defended tariffs as a tool to reduce the trade deficit and rebuild American manufacturing, although 100,000 factory jobs have been lost since January 2025.
Geopolitics may further complicate the outlook. Economists expect the U.S.-Israeli war with Iran, and the resulting shipping restrictions through the Strait of Hormuz, to reduce trade volumes for products ranging from energy goods to fertilizers. Meanwhile, the U.S. goods trade deficit with China rose to $13.1 billion in February from $12.5 billion in January, while the deficit with Mexico widened by $4.1 billion to $16.8 billion. Altogether, the February report paints a mixed picture: American exporters are setting records, but strong imports, volatile policy and global disruptions are keeping the trade gap wide and limiting trade’s contribution to growth.
