US advanced goods trade balance for December -122.1B vs -105.6B estimate

• Prior month -102.9 billion
• Advance goods trade balance -122.1Bvs -105.6B
• Exports of goods for December were $167.5 billion, $7.8 billion less than November exports
• Imports of goods for
  December were $289.6 billion, $10.8 billion more than November imports.

The deficiit is near the the 2022 low. This deficit is likely in response to the Trump tariffs.

Yesterday, the President and Treasury Sec. Bessent said that tariffs may go up by 2.5% each month on all goods. Companies could avoid the tariff by bringing production into the borders of the US.

If a supplier of goods knows prices on imports will go up – especially on goods that just can’t be turned on like a light switch – companies will import all they can now and save. PS the suppliers can also raise prices down the road and blame the tariffs, increasing inflation. That seems to be the dynamics in play which will mess up the numbers going forward.

This article was written by Greg Michalowski at www.forexlive.com.