Economy

U.S. Trade Deficit Nearly Doubles in November as Analysts Cite Supply Chain Rerouting

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Jan 30, 2026

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The United States trade deficit surged 94.6% in November to $56.8 billion, nearly doubling from the previous month’s multi-year low, according to data released Thursday by the Census Bureau. The year-to-date deficit through November reached $839.5 billion, marking an increase of approximately 4% compared to the same period in 2024. A primary driver of the monthly increase was the goods deficit with the European Union, which expanded by $8.2 billion.

Conversely, the U.S. goods deficit with China fell by roughly $1 billion to $13.9 billion for the month. The overall rise in the deficit occurred despite the Trump administration’s implementation of tariff strategies aimed at reducing global trade imbalances. These policies included an April 2025 announcement regarding reciprocal tariffs and a framework agreement established with the EU in August, which set a 15% tariff rate on the majority of European goods.

While the direct deficit with China decreased, supply chain analysts suggest this shift may result from goods being moved through third-party nations rather than a reduction in Chinese manufacturing. Brandon Daniels, CEO of the consultancy firm Exiger, stated that Chinese companies are "transshipping" products through Southeast Asian countries—such as Vietnam, Thailand, and Indonesia—to bypass U.S. tariffs. Exiger estimated that Vietnam accounted for 80% of shipments to the U.S. from companies with 100% Chinese ownership in 2024.

Exiger also alleged that some companies are offsetting tariff costs by utilizing forced labor within their supply chains before products reach secondary markets. Daniels described these practices as "dominance through coercion." Separately, the U.S. Forced Labor Enforcement Task Force reportedly added 78 new entities to its restricted list in 2025, bringing the total number of listed Chinese entities to 144.

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• The overall trade deficit nearly doubled due to surges outside of direct China trade. Census Bureau data revealed a 94.6% increase in the November trade deficit, reaching $56.8 billion, while the year-to-date deficit rose approximately 4% over 2024. A significant factor in this surge was the goods deficit with the European Union, which expanded by $8.2 billion.

• Analysts allege that Chinese companies are rerouting goods to bypass U.S. tariffs. Brandon Daniels, CEO of Exiger, suggested that the drop in the direct China deficit is likely due to "transshipping" products through Southeast Asian nations like Vietnam, Thailand, and Indonesia. Exiger estimated that in 2024, Vietnam accounted for 80% of shipments to the U.S. from companies with 100% Chinese ownership.

• Concerns have been raised regarding the use of coercion to offset tariff costs. Exiger alleged that some companies are utilizing forced labor within their supply chains before products reach secondary markets to mitigate the financial impact of tariffs. Daniels described these practices as "dominance through coercion" rather than a genuine reduction in manufacturing dominance.

How it may affect me

As a U.S. reader: Consumers purchasing European products face a 15% tariff rate on the majority of goods, a policy remaining in place as the trade gap with the EU expands.

Products originating from China may arrive labeled as exports from countries like Vietnam or Thailand as manufacturers reportedly reroute supply chains to evade U.S. tariffs.

The variety of available goods could decrease as federal authorities restrict imports from 78 newly listed entities to prevent items produced via forced labor from entering the market.

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