President Donald Trump took to Truth Social on Wednesday to claim a decisive victory for his “America First” trade policies. He asserted that the United States trade deficit has been slashed by 78%, attributing the contraction to the sweeping “Liberation Day” tariffs implemented in April 2025.
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Trump’s remarks come at a pivotal moment as the U.S. Census Bureau prepares to release the final trade statistics for December 2025 today, Thursday, February 19, 2026. If projections hold, the world’s largest economy could report its first monthly trade surplus in exactly five decades.
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The “Liberation Day” Impact
The cornerstone of this shift was the April 2, 2025, executive order—dubbed “Liberation Day”—which imposed reciprocal tariffs ranging from 10% to 50%. Government data confirms a massive swing in trade flows: the monthly deficit plummeted from a record 140.5 billion in March 2025 to just 29.4 billion by October.
However, the road has been volatile. In November 2025, the deficit widened again to 56.8 billion, a nearly 95% jump from October’s low. This fluctuation highlights the ongoing “tug-of-war” between reduced imports and shifting domestic demand.
December 2025: A Historic Surplus?
Market analysts and government predictions are zeroing in on a 55.50 billion surplus for December 2025. If confirmed, this would mark the first time the U.S. has exported more than it imported on a monthly basis since 1975.
Despite this potential milestone, the full-year 2025 outlook remains in the red. The U.S. is projected to end the year with a deficit exceeding 800 billion. While lower than 2024’s record $1.2 trillion, the figure remains high due to “front-running”—a massive spike in imports during Q1 2025 as businesses rushed to stockpile goods before the April tariffs took effect.
The China Shift and Trade Diversion
The administration’s focus on China has yielded the most visible results. Imports of Chinese goods fell to 288 billion (Jan–Nov 2025), down from 401 billion in the same period of 2024.
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Next, while Chinese imports cooled, trade diverted elsewhere. Nations like Mexico and Vietnam gained significant market share, as the trade gap with China fell below that of the European Union for the first time in years. Therefore, while the total deficit shrank, the source of American imports simply migrated to other Asian and European partners.
Reality Check
President Trump’s “78% reduction” claim uses the March 2025 peak as the baseline. Still, the total deficit for the first 11 months of 2025 actually remained 4.1% higher than in 2024. Therefore, while monthly “snapshot” surpluses are historic, the broader structural trade imbalance remains. Furthermore, Federal Reserve studies indicate that nearly 90% of the tariff costs have been absorbed by American businesses and consumers through higher prices, rather than by foreign exporters.
The Loopholes
The “surplus” forecast for December is partially driven by a temporary surge in non-monetary gold exports and a collapse in consumer goods imports. In fact, many economists warn these are “one-off” fluctuations rather than a permanent rebalancing of the economy. Still, the administration pared back its steepest tariffs for eight key nations (including the UK, Japan, and the EU), creating a “negotiated loophole” that kept trade flowing while the deficit narrowed.
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What This Means for You
If you are an investor or consumer, realize that the era of “cheap imports” has officially transitioned into an era of “reciprocal trade.” First, watch for the official Census Bureau release today at 8:30 AM Eastern Time; the actual surplus figure will dictate market movements for the rest of the week. Then, expect continued price sensitivity in sectors like electronics and pharmaceuticals, where tariff pass-through is highest.
Finally, understand that the U.S. is moving toward a service-heavy surplus. You should look at investments in American financial and tech services, which continue to drive a significant trade surplus even as the goods deficit remains high. Before the end of the quarter, follow the Supreme Court’s upcoming ruling on the legality of the “Liberation Day” tariffs, as it could undo the entire current trade framework.
What’s Next
The U.S. Census Bureau will release the December 2025 International Trade report today. Then, President Trump is expected to address the nation regarding the “Historic Surplus” during a press conference this evening. Finally, look for a new round of trade negotiations with China in March 2026 as the current “truce” is set to expire.
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