With the global economy beginning to feel the effects of the Iran war, the United States’ trade deficit for March will likely widen amidst increased imports and exports. Here are five things to look for when the Department of Commerce releases its latest report regarding the U.S. balance of trade on Tuesday:

 

Strength of the Dollar

March saw the U.S. dollar strengthen largely due to investment in U.S. oil futures amid the Strait of Hormuz closure. That made exports more expensive for foreign countries, with the prices for U.S. exports rising 1.6 percent in March. The result should help reduce the trade deficit slightly by providing a small boost to exports while lowering import costs.

 

AI Driving Imports…

AI-related goods accounted for 23 percent of all U.S. imports in 2025. Imports for capital goods related to computers jumped 70.8% between 2025 Q1 and 2026 Q1. Notably, the effect of AI investment extends beyond typical computer hardware: HVAC and other cooling equipment have increased, as have energy inputs powering the data centers supporting the sector’s continued growth.

 

… and Exports.

While not eclipsing the imports, U.S. exports continue to see foreign demand. Exports of non-defense capital goods excluding aircraft (a marker that’s viewed as an indicator for business spending) increased by 3.4% in March, demonstrating continued interest in American assets. Look for Mexico to remain a key trading partner with the U.S.; last year, the country accounted for 33% of U.S. exports of computer hardware.

 

Oil Begins to Dry, but Not Completely

While February ended with the start of the Iran war and the closure of the Strait of Hormuz, March was when traffic actually evaporated.

Oil is tied to all parts of the economy: from diesel fuel powering shipping vessels and transport trucks, to plastic goods produced domestically and abroad. Rising transport and manufacturing costs will eventually force businesses to address them, perhaps by absorbing some of the expenses before passing them along. But the report will only reflect these larger repercussions in part, as the final oil tankers to traverse the Strait pre-war only reached refineries two weeks ago. That’s not to say larger shocks to global supply chains are not occurring, but they may appear less immediately.

 

Businesses Jump Into Inaction

Fueled by non-binding ceasefires and Trump’s continued flip-flopping on tariffs, geopolitics continue to shake the global economy as companies struggle try to predict the future. The circumstances discourage businesses from investing and expanding their operations; however, the unpredictability makes companies hesitant to upend their supply chains without knowing more on what’s ahead.

“They’re considering what they need to do going forward, but they’re not necessarily willing to implement it just yet because there’s just too much volatility out there,” said Karl Petrick, an economics professor and associate dean at the Hult International Business School. The current conditions likely mean businesses will refrain from making any immediate sweeping changes, as seen in the current low-hire, low-fire job market.