The United States trade deficit in goods reached an all-time record of $1.24 trillion in 2025, driven by a surge in imports that outpaced export growth despite the imposition of heavy tariffs.

While the widening trade gap contributed to a downward revision of fourth-quarter GDP growth estimates, the high volume of capital goods imports—particularly those related to artificial intelligence and data center infrastructure—indicates sustained business investment.

Key Points

• The U.S. goods trade deficit hit a historic high of $1.24 trillion in 2025, with the December trade gap widening 32.6% to $70.3 billion, far exceeding economist forecasts.
• Record-breaking goods trade deficits were recorded with several nations, including Mexico, Vietnam, Taiwan, Ireland, Thailand, and India.
• In contrast to the global trend, the goods trade deficit with China narrowed significantly, falling to $202.1 billion from $295.5 billion the previous year.
• Import growth was driven primarily by capital goods such as computers, telecommunications equipment, and computer accessories, largely fueled by the construction of data centers to support artificial intelligence.
• Despite protectionist trade policies, U.S. manufacturing did not see a resurgence; factory employment decreased by 83,000 jobs between January 2025 and January 2026.

The larger-than-expected trade deficit prompted the Atlanta Federal Reserve to lower its fourth-quarter GDP growth estimate from a 3.6% to a 3.0% annualized rate. While the labor market remains relatively stable, economists noted that hiring has become sluggish due to tariff-related uncertainty and the impact of artificial intelligence.

Ultimately, the data suggests that the aggressive tariff policies failed to reduce overall trade imbalances or spark a manufacturing renaissance, as evidenced by declining factory employment and record deficits with multiple trading partners.

Furthermore, these policies led to increased costs for consumers and businesses, as tariffs raised the prices of imported goods and materials. Many industries reliant on global supply chains faced disruptions, further hampering their competitiveness in international markets. Instead of fostering economic growth, the measures appeared to exacerbate tensions with key trading partners, resulting in retaliatory tariffs that compounded the challenges for exporters.

Other People are Reading

Chief Secretary to the Treasury, James Murray said: “We know there is more to do to stop one in every £10 the government spends going on debt interest, and we will more than halve borrowing by 2030-31 so that money can be spent on policing, schools and the NHS.”

Indian equities appear to have moved past several key uncertainties — from trade developments to recent earnings — yet the market continues to search for its next catalyst. Speaking to ET Now, Karthikraj Lakshmanan from UTI AMC said the macro backdrop remains supportive, noting that “macros are quite good… Q3 earnings were in line… fundamentals look good,” even though sector-specific corrections have weighed on the index in recent sessions.

He acknowledged the disconnect between positive fundamentals and subdued market performance, as the anchor observed that “on paper everything looks okay… but it is not reflecting on the ticker.” Lakshmanan responded that “flows are difficult to predict… if fundamentals and earnings accelerate, markets will follow,” adding that the environment is increasingly becoming a bottom-up market where stock selection matters more than broad liquidity trends.

Looking ahead, he struck an optimistic tone on growth, pointing out that “FY25–FY26 saw single-digit growth… FY27 could see double-digit GDP and earnings growth,” which he believes should support equities even without major earnings upgrades. On valuations, Lakshmanan said “large caps look more attractive… private banks have reasonable valuations,” highlighting financials as one of the more compelling pockets after recent corrections.

Discussing capital goods, he noted that while “business has done well post-COVID… government capex continues,” valuations in several names remain elevated, making selectivity important for investors. On broader markets, he reiterated that “diversification is a must,” adding that although indices may not show deep cuts, many individual mid- and small-cap stocks have undergone “silent corrections,” creating selective opportunities.

In the consumption space, Lakshmanan said “discretionary and durables have better growth prospects,” while within staples, foods appear structurally stronger. On autos, he observed that “PV growth remains strong… valuations must be watched,” and described the electric vehicle opportunity as evolving gradually rather than offering immediate pure-play opportunities.

Turning to primary markets, he said the “pipeline is strong,” suggesting that muted subscriptions and listings are largely cyclical and reflect market conditions rather than a lack of quality issuers.
Overall, Lakshmanan’s message was clear: while near-term triggers may be elusive, improving growth prospects and steady fundamentals should continue to underpin markets, with disciplined stock selection and valuation awareness remaining key for investors.

Q4: 2026-02-18 Earnings Summary

EPS of $0.74 beats by $0.05

 | Revenue of $788.06M (47.40% Y/Y) misses by $20.87M

This article was written by

Three Silicon Valley engineers were arrested and charged with stealing trade secrets from Google and other U.S. technology firms and transferring sensitive data to unauthorized locations, including Iran, federal prosecutors announced Thursday.

Samaneh Ghandali, 41, Soroor Ghandali, 32, and Mohammadjavad Khosravi, also known as Mohammad Khosravi, 40, all of San Jose, were arrested Thursday, according to the Department of Justice (DOJ).

A federal grand jury indicted the engineers on charges of conspiracy to commit trade secret theft, theft and attempted theft of trade secrets, and obstruction of justice.

“We have enhanced safeguards to protect our confidential information and immediately alerted law enforcement after discovering this incident,” Google Spokesperson José Castañeda said in a statement to FOX Business. “Today’s indictments are an important step towards accountability and we’ll continue working to ensure our trade secrets remain secure.”

META CEO TO TESTIFY IN HIGH-STAKES TRIAL THAT COULD COST BIG TECH BILLIONS

The defendants gained employment at technology companies focused on mobile computer processors, according to the indictment unsealed Thursday.

According to prosecutors, sisters Samaneh Ghandali and Soroor Ghandali worked at Google before moving to another technology company identified as “Company 3,” headquartered in Santa Clara, California. Khosravi, who is married to Samaneh Ghandali, worked at a separate company identified in the indictment as Company 2, headquartered in San Diego.

The DOJ alleges the defendants used their positions to access confidential and sensitive information as part of a scheme to steal trade secrets.

The defendants “exfiltrated confidential and sensitive documents, including trade secrets related to processor security and cryptography and other technologies, from Google and other technology companies to unauthorized third-party and personal locations, including to work devices associated with each other’s employers, and to Iran.” 

“As alleged, the defendants exploited their positions to steal confidential trade secrets from their employers,” United States Attorney Craig H. Missakian said in a statement. “Our office will continue to lead the way in protecting American innovation and we will vigorously prosecute individuals who steal sensitive advanced technologies for improper gain or to benefit countries that wish us ill.”

GOOGLE PLANS TO SPEND BIG AS AI RACE WITH RIVALS INTENSIFIES

The indictment alleges that while working at Google, Samaneh Ghandali transferred hundreds of files, including company trade secrets, to a third-party communications platform. Soroor Ghandali is also accused of transferring Google trade secret files while employed at the company.

Prosecutors allege the defendants attempted to conceal their actions by submitting “false, signed affidavits to victim technology companies about the conduct and the stolen trade secrets, destroying exfiltrated files and other records from electronic devices, and concealing the methods of exfiltration to avoid detection by the victim technology companies.”

According to a Google spokesperson, the company discovered the alleged theft through routine security monitoring and referred the case to law enforcement after conducting its own internal investigation.

TECH TITANS ELON MUSK AND REID HOFFMAN ATTACK EACH OTHER OVER LATEST EPSTEIN EMAILS

Google said it maintains robust security measures to protect its confidential information and intellectual property, including limiting employee access to sensitive data, requiring device authentication before network access, and mandating two-factor authentication for work accounts.

Additionally, Google logs employee activity on its network, including file transfers to third-party platforms such as Telegram. The company began blocking uploads to Telegram from corporate laptops last year.

The indictment states that Google took “numerous measures to safeguard its confidential technology, information, and trade secrets.”

CLICK HERE TO GET FOX BUSINESS ON THE GO

Prosecutors said Google secured its physical space and restricted access to its buildings, along with its computer systems and network.

According to the indictment, Samaneh Ghandali is an Iranian national who became a U.S. citizen around 2018, Mohammadjavad Khosravi is an Iranian national who became a U.S. legal permanent resident around 2019, and Soroor Ghandali was in the United States on a nonimmigrant student visa.