The U.S. trade deficit increased to a record high in March, as the looming threat of President Donald Trump's imminent tariffs fueled stockpiling by importers, who sought to build their inventories before their costs spiked or items became unavailable.

The Bureau of Economic Analysis (BEA) said the goods trade deficit—the difference between imports and exports—was $163.5 billion during the month, an 11.2 percent increase from February.

There is a trade deficit if imports exceed exports, and a surplus if the difference is the other way around. There was a smaller trade surplus for services in March, at $23 billion, down by $800 million from February.

Why It Matters

Trump has pointed to trade deficits as a key motivator of his tariff policy. He views a trade deficit as a sign that the U.S. is being taken advantage of by its trading partners.

The widening deficit in the months leading up to Trump's tariffs shows how concerned American businesses were by a looming trade war, which is threatening the domestic and global economies.

What To Know

In April, Trump introduced his sweeping reciprocal tariffs on dozens of trading partners, at a rate set individually for each to reflect what he said were the trade barriers they imposed on the U.S.

But he temporarily paused the reciprocal tariff rate for all except China, to give space for negotiations on new trade deals.

A baseline 10 percent tariff on all foreign imports, and others relating to national security concerns, as well as those for autos and certain metals, remain in place.

The economy contracted by 0.3 percent in the first three months of the year, the BEA said previously, as a result of a big spike in imports that dragged down the headline GDP number.

What People Are Saying

President Donald Trump, to reporters on May 5, about the outlook for trade discussions with different countries: "At some point in the next two weeks or three weeks, I'm going to be setting the deal," adding that some countries "had a tremendous trade surplus, surplus their way, with us, they've taken advantage of us in various ways, and we fully understand what they were doing."

"We were being led by people that were not very smart. They were able to be taken advantage of, but I can't be taken advantage of. So...at a certain point, I'll be just setting a certain tariff number."

What Happens Next

Trump's team says it is involved in dozens of discussions with countries about new trade deals as a result of his imposition of tariffs. Trump says he expects to make announcements on the new deals within a couple of weeks.