U.S. Trade Deficit Hits Record $162 Billion

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U.S. Trade Deficit Hits Record $162 Billion

The U.S. goods trade deficit widened by 9.6% in March to a record $162 billion, according to new data from the Commerce Department’s Census Bureau. The surge was driven by businesses rushing to import goods ahead of the Trump administration’s broad tariff increases.

Imports soared to an all-time high of $342.7 billion, led by a 27.5% jump in consumer goods, along with strong increases in vehicle and capital goods shipments. Meanwhile, goods exports rose modestly by $2.2 billion to $180.8 billion, aided by automotive, food, and industrial supply shipments. However, exports of capital and consumer goods declined.

Economists say the surge in imports is likely to drag the first-quarter GDP into negative territory.

• Expert Prediction📉 : Goldman Sachs now expects a 0.8% contraction, while JPMorgan projects a 1.75% decline — both down sharply from 2.4% growth in Q4 2024.

• Falling goods 📦: Retail inventories fell 0.1%, weighed down by a 1.1% drop at auto dealerships. Economists caution that the U.S. economy remains in a fragile position as businesses navigate policy uncertainty and rising import costs.

Kohl’s CEO Fired for Ethics Breach Amid Sales Slump

Kohl’s has abruptly dismissed its newly appointed CEO, Ashley Buchanan, citing unethical conduct involving vendor deals with hidden conflicts of interest. Buchanan, who took the helm in January 2025 after leading Michaels, lasted just under five months. Michael Bender, current chairman of the board, has been named interim CEO.

Kohl’s announced that it had terminated its CEO for violating company policies by instructing the retailer to engage in vendor transactions involving undisclosed conflicts of interest.

The company emphasized that Buchanan’s dismissal was unrelated to Kohl’s financial performance. Still, his sudden exit comes at a difficult moment for the department store chain, which is grappling with declining sales and waning appeal among younger consumers. Kohl’s has not reported a year-over-year sales increase since late 2021.

China Shipments Plunge as U.S. Tariffs Bite

Imports from China to the U.S. are collapsing, with major retailers warning of supply shortages and price hikes as Trump’s 145% tariffs take full effect.

The Port of Los Angeles—a key entry point for U.S. imports—is already seeing volumes down 10% year-over-year. Port director Eugene Seroka predicts arrivals will drop 35% within weeks, calling the slowdown a “freeze” in cargo flow.

Flexport reports container bookings from China to the U.S. are down 60%, while ports in Vietnam and Thailand have seen a 5–10% uptick as exporters look to reroute around tariffs. Walmart and Target have privately cautioned the White House about looming shortages.

The disruption comes during the start of the U.S. shipping year, typically when Halloween and back-to-school goods begin to land. Logistics firms report mass shipment pauses, with ocean carriers canceling sailings due to half-filled containers. Ocean freight rates have collapsed—from $8,100 in mid-2024 to $2,327 currently, according to Freightos.

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TLDR 🗓️

Shein and Temu Rise US Prices

Two of America's most downloaded shopping apps—Temu and Shein—are feeling the heat from President Trump’s sweeping 145% tariffs on Chinese imports.

Temu has added “import charges” as high as 150%, more than doubling prices on many products. A $12 bathing suit now ships with an $18 tariff, bringing the total to over $30. The once ultra-cheap e-commerce player is now pushing customers toward U.S.-shipped items labeled with “no import fees.”

Shein, meanwhile, has responded with steep base price increases—some reportedly up to 377% on certain home and kitchen goods. Unlike Temu, Shein includes the tariff cost in the item price and avoids tacking on separate fees at checkout.

Both companies had warned of incoming price hikes after the de minimis exemption, which allowed under-$800 imports to bypass tariffs, was rolled back under Trump’s new trade agenda. That exemption had helped fuel their meteoric rise in the U.S. market.

Toy and Holiday Goods Industry Hit Hard by Tariffs

U.S. toy makers, holiday retailers, and Christmas decoration importers are warning of widespread product shortages and price hikes as President Trump’s new 145% tariffs on Chinese imports freeze global supply chains.

Factories in China produce nearly 80% of America’s toys and 90% of Christmas decorations. Orders for winter goods are typically finalized by April to ensure on-time delivery by fall, but this year, many manufacturers and stores have either paused or canceled shipments entirely due to the spike in costs.

The Toy Association reports that over 60% of small manufacturers have canceled orders. Half say they may go out of business within months if tariffs stay in place.

According to a NYT report, retailers like West Side Kids in NYC and Aldik Home in Los Angeles are already facing shipment delays, partial order fulfillment, and price markups between 20% and 100%.

UPS to Cut 20,000 Jobs as Amazon Volume Falls

UPS is laying off 20,000 workers and shuttering 73 facilities as it restructures operations in response to a steep drop in Amazon deliveries and the mounting fallout from U.S. tariffs.

The parcel giant says it will reduce its Amazon-related shipping volume by 50%, citing a strategic pullback from what it described as “money-losing” fulfillment work. The cuts come despite a contractual obligation to create union jobs, setting up potential conflict with Teamsters leadership, which has promised to fight any contract violations.

UPS is bracing for further disruption as duty-free treatment ends for low-cost shipments from Temu and Shein in May. Both platforms have begun adding import fees, pushing up prices and slowing demand, translating to fewer parcels and tighter margins for UPS.

In the meantime, UPS is slashing $3.5 billion in costs and preparing for a muted holiday season.

China Ramps Up Oil Imports as Tariffs Push Prices Down

Crude oil imports into China surged to nearly 11 million barrels per day in April — the highest in 18 months — as traders move quickly to stockpile amid tumbling energy prices.

The buying spree began with Iranian oil amid fresh U.S. sanctions but has since broadened, fueled by a collapse in oil prices triggered by Trump’s tariff wave and increased OPEC output. Prices for Brent crude dipped to just above $65 per barrel, with forecasts suggesting a further drop to $62.50 later this year.

Analysts say China is capitalizing on short-term price dips while hedging against long-term economic uncertainty. UBS notes that Beijing’s strategy is classic: stock up when prices fall, pull back when they rise.

China continues to reduce its Iranian imports under U.S. pressure, but analysts say discounted cargo is still making its way in. Over 40 million barrels of Iranian oil now sit in tankers offshore, including 18 million in Singapore and 10 million in the Yellow Sea.

Amazon to Invest $4 Billion in Rural Expansion

Amazon is investing over $4 billion to expand its rural delivery network across the U.S., a move aimed at faster service, deeper market penetration, and job creation in underserved communities.

The company plans to triple the size of its rural network by the end of 2026, adding over 200 delivery stations and enabling delivery of a billion more packages annually across 13,000 zip codes.

The expansion is expected to generate 100,000 new jobs and driving opportunities, leveraging Amazon’s Delivery Service Partner, Flex, and Hub Delivery programs. Many of these roles will support seven-day service in areas where other logistics providers are scaling back due to high delivery costs.

Amazon says the initiative will cut average delivery times in half for small-town Prime members and bolster access to over 300 million items.

Trump Softens Tariffs on Auto Parts for U.S.-Built Cars

President Donald Trump has amended a key executive order to ease the impact of upcoming tariffs on auto parts, offering partial cost relief to domestic automakers.

Starting May 3, a 25% tariff on auto parts will take effect. But under the revised order, automakers assembling vehicles in the U.S. can offset up to 3.75% of their tariff burden, retroactive to April 3. This offset drops to 2.5% next year and is scheduled for removal after two years.

To qualify, manufacturers must show domestic production plans and tariff exposure, with a process to be established by the Commerce Department within 30 days. The order also clarifies that these tariffs will not stack with existing duties on cars, steel, aluminum, or goods from non-USMCA countries — a concern raised by industry groups.

Suggested Reading: How Will Trump Tariffs Affect the Auto Industry

DHL Reverses Suspension, Resumes Shipments Over $800

DHL has reversed its decision to halt consumer shipments valued over $800 to the U.S., just one week after suspending the service due to new customs rules and increased inspection workloads linked to Trump’s 10% tariff regime.

The company said it reached the decision following constructive discussions with the Trump administration, which acknowledged DHL’s operational constraints and agreed to facilitate a quicker, more manageable customs process.

Last week, DHL had cited a “surge in formal customs clearances”—a result of the tariff changes—as a key reason for the suspension. Formal entries require detailed paperwork and bond filings, which overwhelmed DHL’s processing system.

Under the new arrangement, packages worth between $800 and $2,500 will now qualify for “informal entry” via U.S. Customs and Border Protection (CBP), which involves less paperwork and no bond requirements.

Manufacturing Slumps Again as Tariffs Strain U.S. Supply Chains

U.S. manufacturing continued its downturn in April, with the sector facing renewed pressure from rising input costs and ongoing supply chain disruptions. The Institute for Supply Management reported a manufacturing PMI of 48.7 — a five-month low and further below the 50-point threshold that separates expansion from contraction.

Though new orders rose slightly to 47.2 from March’s deeper slump, overall demand remains weak. Production levels were flat, and supplier deliveries slowed further, a sign that materials are taking longer to arrive as trade bottlenecks persist. At the same time, the ISM’s measure of prices paid by manufacturers increased to 69.8 — its highest reading since June 2022 — suggesting that inflationary pressure across goods is picking up again.

Tariffs Trigger Drop in China–U.S. Airfreight

A sharp drop in cross-border e-commerce demand is grounding cargo flights out of China. Freight forwarder Dimerco in its monthly market report stated that several chartered freighters have been cancelled since mid-April — a direct consequence of the U.S. imposing tariffs of up to 145% on Chinese imports and ending the de minimis exemption.

With the exemption set to expire on May 2 and new customs scrutiny already in effect, e-commerce volumes to the U.S. have collapsed by nearly 50% compared to this time last year. Major Chinese carriers are now evaluating whether to suspend more services, raising concerns about tightening capacity on trans-Pacific routes.

Instead, freight capacity is shifting toward Latin America, especially Mexico, where demand has remained resilient. Meanwhile, Southeast Asia is seeing relatively stable volumes, buoyed by a 90-day tariff exemption granted by the U.S., giving exporters in Vietnam, Taiwan, Thailand, and Japan a temporary edge.

Amazon Denies Tariff Labeling Plan After White House Blowback

Amid tariff-fueled price hikes and growing public scrutiny, reports surfaced this week that Amazon planned to list tariff costs next to product prices on its platform — a move the White House immediately blasted as “hostile and political.”

But Amazon says the claim was overblown and incorrect. According to spokesperson Tim Doyle, the idea was briefly considered for Amazon Haul, its low-cost storefront, but was “never approved and is not going to happen.”

The backlash came swiftly. White House Press Secretary Karoline Leavitt accused Amazon of colluding with “Chinese propaganda,” and President Trump reportedly called Jeff Bezos directly to raise concerns.

Tidbits 🍿

• President Trump has signed an executive order mandating English proficiency for all commercial truck drivers in the U.S., citing public safety and national security

• Meta reported $42 billion in Q1 revenue, up 16% year-over-year and beating analyst estimates. The strong results eased fears that tariffs would dent its global ad business, pushing shares up 3% after hours.

• After months of tense negotiations, the United States and Ukraine have signed a landmark agreement granting Washington a share in the profits from Ukraine’s vast natural resources

Reading List 📚 :

This week's top book picks from CrossDock 📖:

• Boomerang by Michael Lewis

• Door to Door Edward Humes

Do you have recommendations? Drop us a message, and we will add it to next week’s list.

This newsletter was curated by Shyam Gowtham

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