The U.S. goods trade deficit widened to its highest level since early last year in July, driven by a surge in imports, primarily fueled by increased shipments of capital equipment. Data released by the U.S. Commerce Department on Thursday showed that the goods trade deficit expanded by 17.2% month-on-month to $118.8 billion in July, the highest level since March 2025, compared to economists' median forecast of $100.5 billion. The figures are unadjusted for inflation. Imports rose 3.7% in July, while goods exports fell 2.9%. The U.S. trade deficit has fluctuated in recent months. On the one hand, the war with Iran has boosted global demand for U.S. petroleum products; on the other hand, U.S. companies have stockpiled goods and raw materials to mitigate the impact of supply chain disruptions. Meanwhile, companies are adapting to changing tariff rates, and imports of artificial intelligence-related equipment remain strong.
