Insights 
VT 
The US international trade balance for March was -$140.5 billion, compared to an expected -$137.0 billion. The previous trade balance was -$122.7 billion, marking the largest recorded US trade deficit.
The goods trade balance widened to -$163.17 billion from the prior -$147.85 billion. Exports grew by 0.2%, while imports increased by 4.4%. As tariffs were front-run, imports saw a $17.8 billion rise to $346.8 billion.
Import Trends
Pharmaceutical preparations rose by $20.9 billion, computer accessories by $2.0 billion, and passenger cars by $2.1 billion in imports. However, industrial supplies and materials dropped by $10.7 billion due to slowed gold purchases and impacts from steel and aluminium tariffs.
Finished metal shapes saw a decrease of $10.3 billion, nonmonetary gold by $1.8 billion, and crude oil by $1.2 billion. The significant reduction in finished metal shapes, a 45% month-on-month drop, reflects pre-tariff stockpiling, followed by a decline after tariffs began on March 12. This situation is anticipated to stabilise in the upcoming months.
This report shows that the United States recorded its widest trade deficit on record in March, as imports surged well ahead of expectations, outpacing a minimal rise in exports. The goods trade gap widened sharply, mainly driven by a spike in pharmaceutical, technology-related and automotive imports. At the same time, areas once inflating the import figures – such as gold, steel and finished metal products – contracted as earlier stockpiling gave way to soft demand post-tariff implementation.
The data suggests that companies opted to front-load shipments before known tariff increases took effect. We interpret this behaviour as a response to policy uncertainty, which was met with broad inventory accumulation during the previous two months. This explains the substantial monthly rise in inbound pharmaceutical goods and other high-value categories. These kinds of distortions are unlikely to persist for extended periods, particularly when demand patterns and input costs reset after duties are in place.
Trade Patterns and Market Impact
Finished metal product imports plunged by nearly half compared to the previous month, a reaction to prior acceleration in purchases ahead of higher costs. That type of retracement signals an intentional slowdown following a temporary build-up, one often seen in heavily trade-sensitive sectors. We’ve witnessed similar patterns in past cycles where businesses rush to maintain margins before policy changes, then withdraw until pricing and supply chains adjust.
For those who monitor near-term volatility and positioning in rates or option markets, it becomes clear that one cannot just weigh present flows. Instead, attention should shift toward recognising where these movements reflect one-off attempts to avoid near-term regulatory costs. Short-term flows appear exaggerated, as tail-end consumer demand has not picked up to match the import spike.
From this, it’s reasonable to expect pressure on domestic production indicators in the next few releases. Inventories will be drawn down more slowly, particularly as demand lags the import rush. Lower industrial supply volumes point to softer usage and capital deployment, not offset by materials investments or export exposure. That aligns with broader commercial data showing discomfort absorbing elevated storage levels, now that inbound costs are higher and fewer incentives exist to overstock ahead.
When evaluating risk exposure, it’s worth mapping out the divergence between sectors with ongoing purchasing and those where restrictions and cost pressures have suppressed trade. Deprioritising inputs like finished metals and nonmonetary gold shows how sensitive some supply chains are in timing their inventory cycles with trade conditions, especially in manufacturing-driven hedging strategies.
For us, the action lies not only in the tariff-driven shifts themselves, but in the way pricing pressure and timing decisions carve into commodity-linked instruments. Recent rallies in imported goods point to pricing and logistics tightening, opening up short-term entries amid overstretched positions. Equally, declines in industrial imports provide a counterbalance, likely removing some of the drag that was priced into spreads earlier in the year.
Altogether, this environment demands closer attention to timing mismatches and policy-reactive trade patterns – these are not narratives, but rather identifiable volume signals with traceable cost impacts, reflected in swaps and forward indicators of industrial activity. Key opportunity sits in parsing those figures, reacting to what is measurable, not what was assumed ahead of tariffs being applied.
