U.S. Trade Deficit Widens To Largest Since March 2025 In July

(RTTNews) - Reflecting a jump in imports and a slump in exports, the Commerce Department released a report on Thursday showing the U.S. trade deficit widened significantly in the month of July.

The Commerce Department said the trade deficit surged to $88.6 billion in July from a revised $71.2 billion in June.

Economists had expected the trade deficit to increase to $83.0 billion from the $73.3 billion originally reported for the previous month.

With the bigger than expected jump, the trade deficit reached its highest level since hitting a record high of $133.0 billion in March 2025.

The wider trade deficit partly reflected the sharp increase in the value of imports, which shot up by 2.8 percent to $399.3 billion in July after tumbling by 1.8 percent to $388.5 billion in June.

The value of imports reached the highest level since March 2025 amid a spike in imports of capital goods, including computers and computer accessories.

Meanwhile, the report said the value of exports plunged by 2.1 percent to $310.7 billion in July after falling by 0.8 percent to $317.3 billion in June.

Steep drops in exports of crude oil and non-monetary gold more than offset increases in exports of capital goods and pharmaceuticals.

"It's early in the quarter, but July's data point to a more than 1ppt drag from net trade on Q3 GDP," said Grace Zwemmer, U.S. Economist at Oxford Economics.

She added, "However, the composition of imports means the drag from net trade will be mostly offset by a 1.1ppt contribution to GDP growth from increased equipment spending."

The Commerce Department also said the goods deficit widened to $119.6 billion in July from $102.0 billion in June, while the service surplus ticked up to $31.0 billion in July from $30.8 billion in June.