NEED TO KNOW

• Trade gap rose 4.4% in March to $60.3 billion, Commerce reported.
• Exports climbed 2% to $320.9 billion; imports gained 2.3% to $381.2 billion.
• First data snapshot since the Supreme Court voided IEEPA tariffs February 20.

WASHINGTON, DC (TDR) — The U.S. trade deficit widened to $60.3 billion in March, the first monthly reading since the Supreme Court stripped the White House of its emergency tariff powers.

The big picture: The March data is the first clean look at trade flows without the IEEPA tariff regime that defined Trump's second-term economic policy.

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• The 6-3 Supreme Court ruling on February 20 invalidated tariffs on nearly every U.S. trading partner.
• Trump replaced them within days with a flat 10% Section 122 tariff covering roughly $1.2 trillion in imports.

Why it matters: The deficit is the single statistic Trump cited most often to justify tariffs — and the data cuts against neat narratives on both sides.

• Q1 2026 deficit ran 55% below Q1 2025, suggesting last year's tariff blitz did compress imports.
• The March bounce signals importers repositioned the moment legal pressure eased.

Driving the news: Goods imports jumped as the broad tariff wall came down, with several Asian trade partners seeing the deficit widen sharply.

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• Taiwan deficit hit $20.6 billion, the largest bilateral gap in March.
• China deficit grew for a third straight month to $14 billion.
• Petroleum trade swung to its biggest price-adjusted surplus on record.
• Real merchandise deficit widened 6.7% to $90.8 billion.

What they're saying: The administration's economic team is openly telegraphing the plan to rebuild the tariff wall through different statutory authority.

• Chief Justice John Roberts, majority opinion — Tariff power belongs to "Congress alone" under the Constitution.
• Treasury Secretary Scott Bessent told Davis Wright Tremaine analysts he expects "the tariff rates will be back to their old rate" once Section 122 expires.
• USTR Ambassador Jamieson Greer has forecast accelerated Section 301 findings by late July.

Yes, but: The headline jump masks a year-over-year picture that complicates both political camps.

• Q1 exports rose 12% YoY while imports fell 9.1%, leaving the deficit well below 2025 even after March's bounce.
• The three-month moving average of $57.6 billion is $70.4 billion lower than a year earlier.

Between the lines: The administration's pivot to Section 301 isn't a policy adjustment — it's a workaround. The Court ruled the executive branch can't use emergency powers to set tariff schedules. Section 301 requires findings of unfair foreign trade practices and triggers a multi-step process, not a presidential decree. The March 11 USTR launch targeting 16 economies on industrial overcapacity, followed a day later by forced-labor probes into 60 trading partners, is engineered to reconstruct the IEEPA tariff wall through a different statutory door before Section 122 forces a congressional vote.

What's next:

• April trade data drops June 9, the first full post-ruling month.
• The Section 122 10% tariff expires July 23 without congressional reauthorization.
• USTR public hearings on the new Section 301 cases begin April 28, with tariff actions targeted by July 24.

If the deficit shrank under tariffs that were ruled unconstitutional, what's the right way to weigh policy outcomes against the legal authority used to achieve them?

Sources

This report was compiled using data from the U.S. Bureau of Economic Analysis, reporting by Yahoo Finance and DNYUZ, the Supreme Court opinion in Learning Resources, Inc. v. Trump, official USTR releases, and analysis from the Tax Foundation, White & Case, and Davis Wright Tremaine.

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