By Matthew Holloway |
The U.S. trade deficit widened to $88.58 billion in July, increasing $17.39 billion from June and ending the month 43 percent above its 12-month average, according to an analysis released Thursday by Republicans on the Joint Economic Committee (JEC).
The Bureau of Economic Analysis (BEA) and U.S. Census Bureau reported that the deficit increased 24.4 percent from a revised $71.2 billion in June. Total exports declined $6.6 billion to $310.7 billion, and imports increased $10.8 billion to $399.3 billion.
The monthly figures are seasonally adjusted and are not adjusted for changes in prices.
The July increase occurred within a year-to-date decline in the trade gap. Through the first seven months of 2026, the goods and services deficit was $188.4 billion, or 29.6 percent, lower than during the same period in 2025. Exports increased $237.2 billion, or 12 percent, and imports increased $48.8 billion, or 1.9 percent.
The latest figures were released as the Trump administration continues rebuilding its tariff framework following legal setbacks and imposing new duties on goods from dozens of countries.
The goods deficit increased $17.62 billion to $119.59 billion, placing it 31 percent above its 12-month average. The services surplus increased by $225 million to $31.02 billion, reaching 5 percent above its 12-month average.
Exports of goods declined $6.2 billion to $201 billion during July. The decrease included reductions of $4.5 billion in crude oil exports and $3.9 billion in nonmonetary gold exports. Imports of goods increased $11.4 billion to $320.6 billion, led by increases of $6.9 billion in computers, $6.6 billion in computer accessories, and $1.2 billion in semiconductors.
The Washington Times attributed much of the technology-related increase to demand associated with the expansion of artificial intelligence infrastructure. Computers, computer accessories, and semiconductors produced a combined monthly import increase of approximately $14.7 billion.
Over the 12 months ending in July, the United States recorded a total trade deficit of $743.58 billion. The country ran a $1.10 trillion deficit in goods and a $353.73 billion surplus in services. Total exports reached $3.67 trillion, and imports totaled $4.41 trillion during the period.
Vietnam accounted for the largest goods trade deficit over the 12-month period at $219.12 billion, representing 20.39 percent of the total goods deficit. Mexico followed at $213.35 billion, or 19.85 percent, and Taiwan ranked third at $203.67 billion, or 18.95 percent.
The largest goods trade surpluses were recorded with the Netherlands at $79.74 billion, the United Kingdom at $45.12 billion, and Hong Kong at $43.90 billion. The BEA’s July report also recorded monthly goods deficits of $27.5 billion with Mexico, $23.3 billion with Vietnam, $18.1 billion with Taiwan, and $15.2 billion with China.
Civilian aircraft, engines, equipment, and parts; nonmonetary gold; and crude oil were the country’s three largest goods exports by value during the 12 months ending in July. Together, the categories accounted for 17.94 percent of exported goods.
U.S. goods exports to Mexico totaled $370.39 billion, followed by Canada at $337.85 billion, and the United Kingdom at $109.39 billion. The three countries accounted for 34.62 percent of U.S. goods exports during the period.
Computers, computer accessories, and pharmaceutical preparations were the three largest imported-goods categories by value, accounting for 20.89 percent of all goods imports. The United States imported $583.73 billion in goods from Mexico, $385.96 billion from Canada, and $271.07 billion from China. Together, the three countries supplied 36.11 percent of U.S. goods imports over the 12-month period.
The Trump administration has presented tariffs as a mechanism for encouraging domestic manufacturing, protecting U.S. industries, and producing federal revenue. Commerce Secretary Howard Lutnick said the administration is pursuing a policy under which companies that manufacture products in the United States would avoid tariffs applied to imported goods.
In a Friday social media post, President Trump connected trade policy with his call for the Federal Reserve to lower interest rates.
“Lower the rate or I’ll stop trading with countries with which we have a deficit,” Trump said.
Trump wrote that the United States should have the lowest interest rate in the world and said ending trade with countries that maintain surpluses with the U.S. would be “better than tariffs.”
The BEA and Census Bureau are scheduled to release their August trade report on Oct. 6.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
