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    America’s goods trade deficit widened to $99.3B in December, up from $86.9B previously

    by VT Markets
    /
    Feb 19, 2026
    The U.S. goods trade balance fell to $-99.3B in December, from $-86.9B in the prior period. This means the goods trade deficit widened by $12.4B between the two periods.

    Dollar Outlook And Trade Deficit

    The wider goods trade deficit in December 2025, now at $-99.3B, is a clear negative for the U.S. dollar. A bigger deficit means more dollars leaving the country to pay for imports, which can put downward pressure on the currency. Because of this, we are looking at short U.S. dollar ideas, such as put options on the USD index or call options on the EUR/USD pair. This trade report, which is likely to weigh on Q4 2025 GDP, comes as other data also points to a weaker economy. The Commerce Department’s January 2026 retail sales report showed an unexpected 0.8% drop, adding to signs that the U.S. consumer is slowing. As a result, we are considering protective puts on broad market indices like the S&P 500, in case companies guide earnings lower. With growth cooling, it becomes harder for the Federal Reserve to keep its current stance. Markets are already adjusting: the 10-year Treasury yield fell to 3.75% this week as traders increased the odds of a rate cut by summer. In that environment, long positions in Treasury note futures may benefit from shifting rate expectations.

    Volatility Hedge And Historical Parallel

    We saw a similar setup in Q2 2025. A surprise rise in the trade deficit came before two straight months of weaker manufacturing PMI readings. That stretch also brought a jump in market volatility. Given the current backdrop, it may be sensible to consider call options on the VIX as a hedge against rising uncertainty in the weeks ahead. Create your live VT Markets account and start trading now.

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