Trade in goods: US deficit rises by 17.2 per cent in July

Donald Trump’s trade directives are not yielding any significant results. Despite the tariffs imposed by the Republican administration, the United States continues to buy more from abroad than it sells on global markets. In July, the US goods trade deficit widened, reaching its highest level since March 2025, when importers rushed to buy goods ahead of the White House’s announcement of tariffs on Liberation Day.

According to figures released yesterday by the Department of Commerce, the goods trade deficit rose by 17.2 per cent compared with June, standing at $118.8 billion. The deficit exceeded all the estimates made by economists surveyed by Bloomberg.

Imports of goods rose by 3.7 per cent to $318.2 billion, the highest level since the record set in March 2025, thanks to an 11.3 per cent surge in imports of capital goods, linked to the equipment needed to fuel the boom in investment in artificial intelligence. “This category has been driven by sustained business spending on high-tech products associated with the development of AI, which currently shows no signs of slowing down,” explained Matthew Martin, senior US economist at Oxford Economics. “We expect,” he added, “that imports of capital goods will underpin strong import growth well into 2027.” Imports of consumer goods, by contrast, rose only slightly, whilst other categories, such as industrial goods, saw a decline in arrivals.

US exports of goods, which had reached a record high in April, fell by 2.9 per cent to $199.4 billion, the lowest level since January. The fall was due to an 11.2 per cent decline in overseas sales of industrial supplies: a category which also includes crude oil and petroleum products.

“The larger-than-expected trade deficit in goods will weigh on GDP growth in the third quarter, but it reflects strong demand for AI-related products, not a weakness in the US economy,” said Kathy Bostjancic, chief economist at Nationwide, in a statement.