US trade deficit narrows to US$73.3 billion as imports decline

THE US trade deficit narrowed in June as imports fell for the first time since the start of the year in a broad decline. 

The gap in goods and services trade shrank 5.6 per cent from the prior month to US$73.3 billion, Commerce Department data showed on Tuesday (Aug 4). The value of imports declined 1.8 per cent while exports fell 0.9 per cent.

The trade data wraps up a quarter in which net exports continued to weigh on economic growth. Trade has been volatile month to month amid fluctuating tariff policy, disruptions from war in the Middle East and a rush to invest in artificial intelligence.

While many levies on imports were struck down by the Supreme Court in the first quarter, the Trump administration is seeking other routes to tariff imports.

Imports of computers, peripherals and parts surged in 2025 into early this year as companies aggressively pursue investment in AI.

The latest trade report, however, showed imports of computers and semiconductors took a breather in June. The broader capital goods category that includes such equipment declined for the first time since September 2025.

On an inflation-adjusted basis, the merchandise-trade deficit narrowed to US$94.5 billion in June.

Oil exports

Meanwhile, the value of outbound US shipments of industrial supplies such as oil and petroleum products decreased 4 per cent. The decline reflected cheaper crude prices and a pullback in volume.

Despite the drop in goods exports, shipments of non-monetary gold surged. Trade in this category has been particularly volatile since early last year.

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By country, the US merchandise-trade deficits with Mexico and Canada widened. The Trump administration has recently decided that it would not renew its trade deal with its neighbours, pursuing annual reviews instead, which could fuel additional uncertainty for firms in the months to come.

The US shortfall with China also grew. Vietnam – a major beneficiary of supply-chain shifts since trade tensions between the US and China erupted in US President Donald Trump’s first term – widened as well. 

On the services front, spending by international visitors to the US rose for a second month as the Fifa World Cup kicked off. US travel exports, which measure expenditures by non-US citizens, increased 2.4 per cent to the highest since the start of 2025. BLOOMBERG