Post tariffs, US trade deficit declined, but grows with top 5 trade partners including India: SBI Report

New Delhi [India], October 29 (ANI): Post tariffs, trade deficit of United States declined by USD 42 billion but during the same period it has gone up by USD 9 billion with top five trading partners including India, noted a research report by the State Bank of India (SBI).
The report stated that the total US trade with these top partners rose to USD 257 billion during April-July 2025 from USD 248 billion recorded in January-March 2025.
However, despite the overall rise in trade, the US trade deficit with its top five trading partners widened by USD 9 billion during the same period.
It stated "During the post-tariff period, US trade deficit declined by USD 42 billion...but if we look the trade deficit of US with the top 5 trading partners (+ India), it has increased by USD 9 billion to USD 257 bn"
The analysis in the report revealed that the US trade deficit (not seasonally adjusted), which was more than USD 150 billion in January and March 2025 due to frontloading of exports by other economies before the tariffs took effect, has now declined to less than USD 100 billion per month.
This indicated that, prima facie, the tariffs have been successful in controlling the overall US deficit so far.
However, when viewed in terms of individual trading partners, the results are more nuanced.
The report compared the pre-tariff period (January-March 2025) with the post-tariff period (April-July 2025) and found that the US managed to reduce its trade deficit with China and Switzerland but saw a sharp increase with Vietnam, Mexico, Taiwan, and India.
Specifically, the US trade deficit with China declined from USD 71 billion to USD 58 billion, and with Switzerland from USD 54 billion to USD 1 billion.
In contrast, the report shared that the deficit with Vietnam rose from USD 36 billion to USD 61 billion, with Mexico from USD 47 billion to USD 65 billion, with Taiwan from USD 22 billion to USD 48 billion, and with India from USD 17 billion to USD 23 billion.
In terms of total trade during July 2025, Mexico emerged as the top trading partner of the US, accounting for around 16 per cent of total trade, followed by Canada at about 12.5 per cent, and China at 7.6 per cent. India ranked 10th among the US's trading partners, with a share of 2.7 per cent.
The report concluded that while the US tariffs have helped lower the overall deficit levels, the trade pattern suggests that the deficit is shifting from some traditional partners like China and Switzerland toward emerging trade partners such as Vietnam, Mexico, Taiwan, and India. (ANI)