The U.S. trade deficit dropped by more than half in April, as President Donald Trump's global tariffs reversed a surge of imports that had accelerated ahead of the levies.The Commerce Department reported Thursday that the trade gap fell to $61.6 billion in April, down 55.5% from March — the largest monthly decrease on record. The White House is expected to frame the sharp decline as a victory, with forecasts of a boost to second-quarter GDP. However, analysts caution that the drop may reflect a temporary pause in business activity as companies wait for trade negotiations to progress.Imports fell 16.3% to $351 billion, with goods imports alone declining by a record amount. The plunge came as 10% tariffs on nearly all U.S. trading partners took effect, curbing demand for foreign products. Imports of consumer goods slid by $33 billion, led by decreases in pharmaceuticals and cell phones.Exports, meanwhile, rose 3% to $289.4 billion, buoyed by increased shipments of industrial supplies. However, auto and auto parts exports dropped by $3.3 billion.In March, companies had rushed to import goods ahead of anticipated tariffs, widening the trade gap to $138.3 billion. But in April, the U.S. economy "hit pause on discretionary imports and is now working off inventories," said Nationwide economist Oren Klachkin. “The sharp drop in goods imports, stronger goods exports and larger services surplus narrowed the total April trade gap by the most on record.”Despite the headline improvement, economists remain cautious. “Headline growth figures will overstate the true health of the economy,” warned Oxford Economics senior U.S. economist Matthew Martin.Trump’s tariffs, which began at 10%, were briefly paused for negotiations but are set to resume in July. Goods from China were among the most affected, with trade between the two countries falling to its lowest level since early 2020.Trump and Chinese President Xi Jinping held talks Thursday, with Trump later saying there had been a "very positive conclusion for both countries." But uncertainty persists. Last week, Trump accused China of violating the terms of a temporary trade agreement, which Beijing denied.The April trade gap was the smallest since 2023, government data showed, marking a shift in the U.S. trade balance driven more by policy than demand. Businesses also continued to face sector-specific tariffs, including recent increases on steel, aluminum, and automobiles.