- Prior was -72.9B
- Goods trade -80.8B vs -98.54B
The deficit came in at $54.5B compared to $72.9B in December (revised), a swing of $18.4 billion. The consensus was looking for $66.6B so this is a meaningful miss on the deficit side — which is to say, a positive surprise for GDP math.
The single biggest factor here is gold and precious metals on the export side. Nonmonetary gold exports jumped $4.7 billion in January while “other precious metals” surged $4.1 billion. That’s nearly $9 billion in precious metals exports alone swinging the balance. On the import side, nonmonetary gold imports actually fell $1.1 billion. So gold alone is worth roughly $10 billion of the improvement. That’s the bulk of your beat right there.
This likely reflects the ongoing arbitrage trade where gold is being shipped to the US amid tariff uncertainty and the COMEX-London spread that’s been in play since late 2024. It’s real in the sense that it’s moving — but it’s not exactly reflective of underlying economic activity.
Capital goods exports jumped $5.4 billion, driven by computers (+$2.6B), civilian aircraft (+$1.6B), and computer accessories (+$1.6B). That’s a chunky move higher and it’s harder to dismiss than the gold flows. The computers number in particular stands out — exports of $7.1B in January vs $4.4B in December is a big step up that reflects the booming AI trade.
Total imports fell $2.6 billion, with goods imports down $2.8 billion. The big drags on the import side were pharmaceutical preparations (-$3.4B) and autos (-$2.8B, with trucks -$1.5B and passenger cars -$1.0B). Pharma imports are notoriously lumpy, so that $3.4 billion decline is the kind of thing that reverses. The auto weakness could be pre-tariff jitters affecting ordering patterns, or just noise.
Capital goods imports actually rose $3.4 billion, led by — no surprise — computers (+$3.9B). So there’s a big two-way computer trade happening with AI. The US exported more computers and imported more computers. Semiconductors on the import side were also up.
The deficit with China was $12.5B, roughly in line with December. But the year-over-year improvement is dramatic — it was $31.7B in January 2025. That trade diversion story is alive and well.
Vietnam’s deficit widened to $19.0B from $17.6B in December. Vietnam is now the largest bilateral goods deficit for the US on a monthly basis, which will keep it in the tariff crosshairs.
The deficit with the EU narrowed sharply to $6.1B from $11.1B, with imports from Germany in particular dropping hard — from $15.3B to $10.5B. That’s a $4.8 billion swing in one month from Germany alone.
As for GDP implications, the gold moves are stripped out so that effectively nullifies the ‘beat’ in this report.
This article was written by Adam Button at investinglive.com.
