U.S. Trade Deficit Widens 24% to $88.6 Billion as Imports Surge

The U.S. goods and services trade deficit widened sharply in July as imports climbed and exports declined, reversing part of the improvement seen earlier in the year. The deficit increased 24.4% to $88.6 billion from a revised $71.2 billion in June, according to figures released Thursday by the U.S. Census Bureau and Bureau of Economic Analysis.

Imports rose $10.8 billion, or 2.8%, to $399.3 billion. Exports fell $6.6 billion, or 2.1%, to $310.7 billion. The $17.4 billion increase in the overall deficit was concentrated in goods, where the shortfall widened by $17.6 billion to $119.6 billion. The services surplus increased slightly, by $0.2 billion to $31.0 billion.

The latest U.S. International Trade in Goods and Services release shows that capital goods accounted for the largest movement on the import side. Goods imports increased $11.4 billion to $320.6 billion, with capital goods up $14.4 billion. Computers rose $6.9 billion, computer accessories increased $6.6 billion and semiconductor imports added $1.2 billion.

July’s jump also came against a lower revised June deficit. The government had initially reported a $73.3 billion shortfall for June, but the latest data revised that figure down to $71.2 billion after incorporating more complete information for both goods and services. That revision made the month-to-month widening in July larger than it would have appeared against the previously published June estimate.

Capital goods drove the import increase

The rise in capital-goods imports was large enough to outweigh declines elsewhere in the goods categories. Industrial supplies and materials imports fell $1.8 billion, including a $1.8 billion decline in crude oil. The composition therefore points to equipment and technology products, rather than energy, as the main source of the July increase in imported goods.

Exports moved in the opposite direction. Goods exports declined $6.2 billion to $201.0 billion. Industrial supplies and materials fell $8.7 billion, including a $4.5 billion decrease in crude-oil exports and a $3.9 billion drop in nonmonetary gold. Those declines were partly offset by a $1.9 billion increase in capital-goods exports and a $1.7 billion rise in consumer goods, including a $1.0 billion increase in pharmaceutical preparations.

Services trade changed much less than goods trade. Services exports fell $0.4 billion to $109.7 billion, with lower travel, financial-services and transport exports partly offset by increases in intellectual-property charges and other business services. Services imports declined $0.6 billion to $78.7 billion. Because imports of services fell slightly more than exports, the services surplus edged higher even as the total trade deficit expanded.

The real-goods deficit also widened

Price-adjusted figures show that the deterioration was not only a nominal-dollar effect. The real goods deficit, measured in chained 2017 dollars on a Census basis, increased $12.0 billion, or 12.7%, to $106.4 billion. Real goods imports rose 3.8% to $257.2 billion, while real goods exports fell 1.8% to $150.8 billion.

The nominal goods deficit increased more quickly, by 17.7%, which indicates that price movements affected the size of the dollar change. Still, the direction was the same in both the nominal and inflation-adjusted data: more real goods entered the United States while real goods exports moved lower. That distinction is useful because trade figures feed into broader measures of economic activity, including gross domestic product, using inflation-adjusted estimates rather than the headline nominal values alone.

The government also revised trade data for January through June to incorporate updated quarterly and monthly source information. For June, goods exports were revised up $0.3 billion and services exports were raised $2.3 billion. Goods imports were revised up $0.2 billion and services imports by $0.3 billion. Those changes explain most of the reduction in the June deficit from the figure reported a month earlier.

July’s widening contrasts with the year-to-date trend

Despite the large monthly increase, the cumulative deficit remains smaller than it was at the same point in 2025. Through July, the goods and services deficit was down $188.4 billion, or 29.6%, from the comparable period last year. Exports were $237.2 billion, or 12.0%, higher year to date, while imports were up $48.8 billion, or 1.9%.

The three-month averages tell a more recent story of deterioration. The average trade deficit for the three months ending in July increased $11.9 billion to $78.5 billion. Average exports fell $6.4 billion to $316.0 billion, while average imports increased $5.5 billion to $394.5 billion. Compared with the three months ending in July 2025, the average deficit was $11.7 billion wider.

Country-level goods figures also show several large bilateral gaps. The deficit with Mexico increased $7.2 billion in July to $27.5 billion as imports from Mexico rose to $60.1 billion and exports slipped to $32.6 billion. Deficits with Vietnam, Taiwan and China were $23.3 billion, $18.1 billion and $15.2 billion, respectively. The balance with Switzerland swung from a $2.9 billion surplus in June to a $0.6 billion deficit in July, while the deficit with Canada narrowed by $3.7 billion to $3.2 billion.

Monthly trade data can be volatile, particularly when categories such as nonmonetary gold, energy products or high-value capital equipment move sharply. The July report nevertheless shows a broad enough change to push the total deficit well above June’s revised level, with the combination of rising imports and falling exports working in the same direction. The next U.S. International Trade in Goods and Services release, covering August, is scheduled for October 6 at 8:30 a.m. ET.