The answer varies widely by business, but we can estimate in billions. 
Goods Trade Change from Year Ago in Millions
- November: -15,619
- December: -34,841
- January: -62,220
- February: -34,841
The total is -147,521. If we assume an average of -90,000 that’s about 1.6 months of front-running.
However, a decent chunk of that is physical gold, a financial asset that should not be part of any import-export calculation.
It was gold that threw the GDPNow calculations for a loop, lowering the base GDPNow forecast by two full percentage points.
US Gold Rush
S&P Global comments on the Gold Rush: The story behind January’s US trade data
Imports of goods into the US soared in January by a record amount. At first glance, the explanation appeared obvious: Companies front-loaded imports to avoid impending tariffs. A deeper dive, however, shows little front-loading. The underlying story is one about gold, polypeptide protein and glycoprotein hormones, and computers.
Gold
In December, goods imports rose by $11.3 billion. About 80% of this increase was in the category “finished metal shapes,” which includes gold bars. February saw an unprecedented import surge of $36.2 billion, with finished metal shapes contributing $20.5 billion, or 57% of the total. In 2024, finished metal shapes constituted a tiny fraction of total goods imports, 1.6%.
“Finished metal shapes” is an end-use category under the Census Bureau’s system of classifying imports and exports. The Harmonized System (HS) of classification identifies a product, and gold bars are a component of HS commodity 7115.
HS 7115 shot up by $20.1 billion in January. By mining the data, we determined that 97% of the additional gold bars in HS 7115 arrived via air freight — 99% of it through the New York City Port District — and the vast majority ended up in vaults in New York.
Why were gold bars moving from Switzerland to New York? Switzerland is the world’s premier gold refining hub. It transforms raw gold into standardized high-purity bars — sometimes just resizing them. Brick-sized gold bars in London weigh 400 troy ounces; to be traded in New York, they must be recast into smartphone-sized bars weighing 1,000 grams. Approximately 386 short tons of gold bars were flown to New York from across the world in January because gold commanded a higher price in New York than in London and other places.
Why was the price higher in New York than in London? Normally, the spot prices in these two places differ modestly, reflecting the costs of shipping, storing and financing. The possibility that gold bars will be tariffed created a disparity between what a bar of gold is worth in New York today and in the future, increasing demand in New York — raising its price. New York’s higher spot price then acted as a magnet pulling in gold bars from across the globe, mainly from Zurich.
Transferring gold from Zurich to New York should not change GDP, which measures current production. Our analysis indicates that the Bureau of Economic Analysis will treat January’s gold shipments the same way it treats nonmonetary gold imports, ignoring them. Some analysts take a different view, penciling in a first-quarter decline in real GDP, with net exports slashing more than 3 percentage points from growth.
Outside of gold bars, imports in January still sizzled. Nominal consumer imports increased by $6.0 billion, or over 8%, while capital goods jumped $4.6 billion, or more than 5%. Was front-loading the story here? That is hard to say.
Polypeptides protein and glycoprotein hormones
Pharmaceutical preparations (end-use 40100) grew by $5.2 billion, or 87% of the increase in consumer goods imports. By mining the data, we discovered that HS 293719 — polypeptide protein and glycoprotein hormones and derivatives — was the subgroup behind the increase in pharmaceutical preparations, soaring by $7.9 billion.
Nearly the entire increase, $7.8 billion, originated from Ireland. Likewise, nearly the entire increase, $7.7 billion, listed Indiana as the destination state. Why Ireland? Ireland has become a hub for producing pharmaceutical products. Why Indiana? Indiana is home to one of the world’s largest pharmaceutical companies.
Were pharmaceutical companies front-loading imports to escape an initial round of tariffs? The data does not specify. Outside of pharmaceuticals, the data showed few signs of front-loading consumer goods imports.
Computers and peripherals
Was the surge in computers and peripherals related to tariffs? That is hard to determine because breakthroughs in AI have led to a surge in high-tech hardware investments. For example, in December, nominal imports of computers and computer peripherals stood 57% higher than 12 months earlier.
It is not clear how much of January’s surge in computers and peripherals imports was related to impeding tariffs and how much would have occurred without the tariffs. One thing is clear: Outside of computers and peripherals, one sees little evidence of tariff avoidance in capital goods imports.
Overall, there was not much tariff avoidance in January. February and March will be different.
I disagree with that analysis because the January change from a year ago was an amazing $62 billion.
Finished Metal Shapes
About $47 billion of the import surge is physical gold.
That means there has only been just over 1 month of front running.
But that’s not uniform. Auto manufacturers likely did more, stuffing production on dealer lots.
Small manufacturers will get hit first, and Trump will ignore their complaints.
On May 2 or May 3, Trump is supposed to refine reciprocal further. He is hinting at more auto parts relief, but that is uncertain.
Since he reduced tariffs down to 10 percent except for China, there is a current open window of tariff avoidance by China through Vietnam, India, and Mexico.
Expect Trump to act to close that window.
Seriously Messed Up Supply Chains
We have seriously messed up supply chains in a futile effort to bring back manufacturing to the US.
That’s not going to happen to any significant. But to the extent that it does happen the US will not benefit at all because prices will skyrocket.
For example, the US will never compete with China or Vietnam on shoes or clothes pricing and should not even try.
Trump may have a month to fix this, and most likely a couple weeks. Small manufacturers will quickly go bankrupt under the crushing weight of 145 percent tariffs on China.
Imports Don’t Subtract from GDP
Bear in mind that imports have no influence on GDP.
Wait a second you say. The BEA’s formula is: GDP = Consumption (C) + Investment (I) + Government Spending (G) + (Exports (X) – Imports (M))
However, the BEA only subtracts what should not have been counted in the first place. For example, when you buy a tool at Home Depot, no one knows what percentage is from China, Mexico, or the US.
Assume 75% made in China and 25% US. But 100% of that purchase was added to Consumption (C). To make up for what is counted in consumption but shouldn’t be, the BEA subtracts imports.
The BEA should make this clear but doesn’t. I will. Imports do not impact GDP because they are not domestic product.
GDPNow
Compounding the issue, the economic models do subtract imports (again to take away what never should have been counted).
However, physical gold is a financial asset, so we need to subtract physical gold from the subtraction of imports.
This is how I arrived at ~1 month of front-running inventory, on average, varying widely from 0 to 3 months.
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Not long! Inventories are not particularly high…
More importantly; When trump completely folds on tariffs, how long will it take to repair the damage done by his shoot first, aim later approach to the world?
China, Russia, Japan, Brazil and all of Europe are enjoying greater product availability and lower prices while trump brings our economy to its knees.
Who does trump work for?
Trump’s tariffs strategy:
Tariffs on underpants, specifically.
The cell phone market will be interesting to watch. 2024 was apparently a down year with sales slipping 9% from 2023 numbers. If/when the tariffs go into effect, that should douse a lot of demand as prices rise and put people in the spot of holding onto their devices longer.
Great news for those who think reducing consumption is a worthy goal, despite it’s causes.
Refurbished phones are the answer to fast tech.
https://www.backmarket.com/en-us/l/smartphones/0744fd27-8605-465d-8691-3b6dffda5969
how long? Until they won’t.
How long is a piece of string?
Gonna be a lean christmas…
More consumer goods, will not make a happier Christmas. All joy and peace exists independently of Chinese Cargo Containers.
What are you, some kind of communist? Conspicuous consumption is the backbone of the Christmas Industrial Complex.
Felize Navidad China! Enjoy the flammable Christmas trees!
keep living the dream..
Plastic christmas trees, even from China, will last 20 years.
My new formula: GDP = Mindless Consumption (C) + Inbred Corruption + DisInvestment (I) + New Forms of Predation on Unprotected Consumers (F) + Continued Government OverSpending (on different cronies) (G) + (No New Exports (X) – Collapsing Imports (M) – Toilet Paper Currency
Ireland to Indiana is Abbvie, owner of Allergan (Botox, etc.)
Ireland to Michigan or NJ is Stryker (total joint and orthopedic trauma).
I was wondering about gold and if it would get hit with tariffs. If viewed as a financial asset it I would have thought it may avoid tariffs. Seeing its actual classification as HS 7115 “Finished Metal Shapes” makes me think it will get hit.
Mish, who did the stockpiling of that gold?
Are foreign mining stocks in trouble and are U.S. based operations now commanding a financial advantage?
I enjoy trading and holding quality mining stocks in safe jurisdictions. Now Canada is getting tariffed harshly so it will have an effect. Recent first quarter Canadian gold mining company financial reports have downplayed the tariffs
There may be a case for tariffs to protect certain industries (auto? agriculture?) and supply chains (computers?). But in the current USA, ever panic-stricken, I’m not seeing much examination of the underlying problem: The workshop of the world turned into an empire, and now it has to import its own garlic and drinking glasses.
Sadly, the US economy has evolved into an oligarch-friendly, monopolistic, rent-extraction, cronyism, rendering it un-competitive outside areas like finance, DOD, construction, lawyering and doctoring, high-end biopharmaceuticals and devices, etc.
I was amazed when I saw garlic from China… in Greece! When I left the country in 1997, all my appliances were Greek-made (except the TV), and all our food was domestically produced. Food was the cheapest thing, nobody hungry. Fresh fish any day, anytime. And then, Economists (more worthless than bathroom decorators) applied the EU-mandated rules, and now people have a hard time with groceries. Almost everything is imported. Fresh fish is almost non-existent.
https://ecodna.art/greek-traditional-fishing-boats-destroyed-by-eu-law/
beware the power of intellectuals to destroy what they don’t understand. Its a feature of their education, 3rd or 4th level effects are invisible and not to be considered when making either calculations or policies.
ie short term profit is everything and consequences be damned.
Nobody from China snuck in the dead of night in the ’90s to restock the shelves of Walmart, Home Depot, local hardware stores …
[REACTION] “You let oligarchs feed you lies while they made you fat, poor, and addicted.” –
Corporate America, Private Equity, Hedge Funds, Stonk Market
well beyond any discussion about foreign countries, trade and tariffs.
Yes. Import is fuzzy. Under globalization China assemble Iphones for 20% of the cost, Under Trump, what’s important to our national security is far more important than the GDP. We will make them here in the US. It’s inelastic. The rest is very elastic. We can trade with China, the EU, Canada and Mexico “non Essential” items. Lucky exporters, for them to be in the front of the line, to sell in the US, the largest consumer market, is a must. In order to be in our shelves they have to pay “Rent”. If they don’t like it F**k them. Sell them to Chinese, Indians, or Vietnamese consumers at deflated prices. Everybody can produce non essential items. They are all the same. Higher “Rent”, a smaller gov, higher payroll tax collection and lower rates will cut debt. Pete Hedseth’s budget might rise from $1T to $1,5T.
It’s all about power. We will settle with Canada, Mexico, the EU. Japan, S.korea, India, Vietnam…first When China wakes up Walmart buyers will them: somebody else is already making it for us.
Iphones are critical to national defense? And rare earth minerals aren’t?
Iphones surpress riots (or induce them when needed) by influencing thoughts of the herds of mal-educated. Tik-Tok economics, Facebook illusions, keep them sufficiently entertained until their pockets are drained. Then kill the power grid.
The helpless go insane. An iphone without a charge is an expensive paperweight, in a world without paper, or anyone left who could read a paper if they had it..
needed riots…. like the 2020 Summer of Love?
mostly peaceful riots…cnn
Similar to the Mcdonald’s/minimum wage discussion, the assembly of iphones was likely cheaper to pay people overseas to assemble than to automate that process. With tariffs, those companies are probably already reviewing options to automate that process.
Excellent question and I don’t know the answer but what I do know that it was best to stock up so this past weekend, went to the big box store and bought 1 year supply of consumable items: laundry detergent, paper towels/tissue, vitamins, etc.
Over the past few years I have stocked up on food dry goods but figured now was a good time to do the consumables. Most of the chemicals for these things come from China so if the tariff stuff doesn’t get resolved, prices will skyrocket.
My consumables shopping is now done for the year. Bring it on, “Cry havoc and let loose the tariffs of trade war!”
Ironically, that’s what the Companies should have been doing all this time, since they knew it was coming. Too bad more people like you, we’re not in charge when we needed them… Dolts!
Working on doing the same. Spent the weekend clearing out junk and re-arranging the garage and adding more shelves to store stuff.
At 10 am on Sunday, there were 100+ people waiting outside the big box store to open so I don’t think I was unique with the idea.
Crazy!
I was in mine on Saturday afternoon and it wasn’t busy at all.
tp hoarders. Nice.
tp will be the new gold in a few weeks.
Nicely done! I have turned to bulk buying over the past year or so. I have someone coming to build some storage area in my basement in a couple weeks, for the Same reason. Saves quite a bit of money too, if you have it up front and the space to do so.
Costco sell excellent NSF wire shelving with wheels, 99$
you can reconfigure anytime with a rubber mallet and you can roll them anywhere you need them as your layout changes.
TY!
Is it made in PRC and subject to tariffs?
If you have enough duct tape, you’ll be fine. Do we make our own duct tape?
Gorilla tape is far superior.
its much harder to grow and harvest gorillas in the USA, then Ducts.
Yes! It’s great to have in your car too. I have fixed many a leak,tear, loosened item, etc. in my cars over the decades. A wrench, screwdriver (both), hammer and duct tape goes quite far!
Don’t forget bailing wire!
It appears that Red Brand baler wire is made in the USA.
Question
Inventory isn’t sold immediately which is even more true when front running. If inventory is imported in Q1, but sold in Q2 wouldn’t we get a distortion effect where Q1 GDP is artificially lower due to stockpiling inventory that was never actually sold? Would Q2 then be artificially higher?
In the Soviet Union, supermarket shelves, entire rows, would be empty but you could buy stuff on the black market, local markets etc. It was more difficult, time consuming and expensive. But generally better product. Free market alternatives!
Took a recent trip to Cuba. Outside of the tourist areas, shelves are pretty empty except for liquor. But you can buy just about anything off the street if you know who to talk to. Even saw a guy selling air conditioners. Love it when the government steps in to help us decide what we can and can’t buy and from whom!
@Mish
Do you have an estimate of when the fed will step in and “fix” ( code for blow it) the economy?
If we get stagflation, then there is not much they can do. Powell says he is going to wait and watch.
No – But I will do a post on this idea
T playing a Br’er Rabbit game against The Fed. EU / City of London is the enemy, not Xi. .
you say tomatoe, I say tooMatoh. Xi, city of London, etc, 2 faces of the same false god.
Pls elaborate, your thought processes have sowed confusion here?