Despite Trump’s Taxes, US Trade Deficit Hits $88.6 Billion

The United States trade deficit reached $88.6 billion in July, a peak since March 2025. In fact, the gap increased by 24.4% in thirty days despite the customs duties introduced by Donald Trump. This increase comes from both a rebound in imports and a decline in exports. In addition, investments in artificial intelligence account for a significant portion of the movement, as American companies have acquired more computers, computer accessories and semiconductors abroad.

Imports cause deficit to jump by $17.4 billion

The US goods and services deficit increased from $71.2 billion in June to $88.6 billion in July. It therefore experienced an increase of 17.4 billion dollars in one month. This result remains slightly lower than the $90 billion anticipated by analysts.

Imports increased by 2.8%, to $399.3 billion. At the same time, exports fell by 2.1%, to 310.7 billion. This increase brings the deficit to its highest level in more than a year.

Some data allow us to measure the extent of the imbalance:

• Imports of goods increased 3.7% to $320.6 billion;
• Exports of goods fell 3% to $201 billion;
• The goods-only deficit jumped 17.3% to $119.6 billion;
• The services surplus increased slightly to reach $31 billion.

Services therefore continue to offset part of the goods deficit. However, they are not enough to neutralize the gap triggered by the increase in acquisitions of foreign goods.

Investments in AI boost imports

Capital goods represent the main category behind the increase in imports. Thus, their amount increased by $14.4 billion to reach a record of $140.3 billion, according to on-chain data.

Acquisitions of computers increased by $6.9 billion. Elsewhere, computer accessories added $6.6 billion, while semiconductor imports rebounded by $1.2 billion. This request reflects probably the expenses incurred by American companies in building their artificial intelligence infrastructures.

The widening deficit does not therefore come exclusively from an increase in the consumption of foreign products. Part of the imports is equivalent to investments dedicated to increasing production and computing capacities in the United States. These expenses would improve productivity in the long term, but they automatically deteriorate the trade balance.

Energy and gold exports decline

American foreign trade is also suffering from a reduction in exports. Thus, sales of industrial supplies and materials fell by $8.7 billion. Crude oil and non-monetary gold account for most of this decline.

Nevertheless, exports of capital goods increased by $1.9 billion. Those of consumer goods increased by $1.7 billion thanks to pharmaceutical products. Such increases did not offset the decline in other categories.

Trade in services also declined slightly. Thus, their exports fell by 400 million dollars, to 109.7 billion dollars. Imports fell by $600 million to $78.7 billion.

Customs duties do not guarantee a rapid reduction in the deficit

Donald Trump introduced high customs duties in order to reduce imports and support American production. However, the United States recorded record goods deficits last July with Mexico, Vietnam, Taiwan, Thailand, South Korea and Malaysia.

This result is not enough to conclusively conclude that the commercial strategy has failed. Companies are ramping up orders before new tariffs are implemented, changing suppliers or continuing to import products that are difficult to manufacture in the United States. Strong domestic demand can also maintain foreign acquisitions despite rising prices.

Ultimately, the trade deficit adjusted for inflation grew by 12.7%, to $106.4 billion. This progression would weigh on American growth in the third quarter. Foreign trade had already taken 1.14 points from growth in the previous quarter, while GDP increased by 1.5% at an annualized rate. The August statistics will help determine whether the July jump represents a temporary movement or a new trend.