The AI revolution is the primary reason the U.S. trade deficit is exploding.
April 16, 2026
Original Paper
Trade in AI-Related Products
SSRN · 6566848
The Takeaway
We talk about AI as a software or productivity tool, but its physical footprint is massive and mostly imported. In 2025, AI-related hardware accounted for a staggering 23% of all U.S. imports, shifting the entire balance of trade. Without the current AI boom, the national trade deficit would be nearly $200 billion smaller than it is today. For the average person, this means the chips and servers powering your favorite chatbots aren't just tech milestones—they are macro forces weakening the dollar's trade position. The AI boom isn't just happening on your screen; it's physically moving billions of dollars out of the country.
From the abstract
This paper documents facts about international trade in AI-related products. I develop a large language model (LLM) classification tool that maps HS10 codes in U.S. trade data to products used in the construction and operation of AI infrastructure. AI-related products account for 23 percent of U.S. imports in 2025, and imports of these products have grown by 73 percent since 2023. Over the same period, imports of non-AI-related products have grown by only 3 percent, with the divergence between t