The direct stimulus payments that hit bank accounts across the U.S. in March increased incomes by a record amount—but much of it found its way into foreign coffers, pushing the trade deficit up to the highest level on record.
The U.S. international trade deficit rose to a record $74.4 billion in March with more imports on the books than exports, the Commerce Department said in a report Tuesday.
Exports of goods and services through international trade for the month rose 6.6 percent to $200 billion compared to imports of goods and services (up 6.3 percent to $274.5 billion), the report said.
The reasons so much of the stimulus leaked out of the U.S. economy are straightforward. U.S. production was expanding but still restrained by pandemic restrictions in March and low tariff barriers mean that increases in consumer spending typically translate into higher imports. It’s likely that other countries where domestic demand is depressed by the pandemic are off-loading goods and services to the U.S.