US trade deficit widens sharply in July amid tariff fears

The United States trade deficit surged more than expected in July, driven by a sharp rise in imports as businesses rushed to beat another round of tariffs imposed by President Donald Trump, government data showed Thursday.

According to the Department of Commerce, the overall trade gap grew 32.5 percent to $78.3 billion in July, compared to market expectations of $64.2 billion. Imports jumped 5.9 percent to $358.8 billion, while exports inched up by just 0.3 percent to $280.5 billion.

Analysts at Pantheon Macroeconomics linked the wider deficit to “another wave of pre-tariff stockpiling,” noting that companies ramped up imports ahead of higher tariffs that took effect in August. Trump had previously introduced a 10-percent tariff on nearly all US trading partners in April, delaying plans to raise the duties further until last month.

The latest tariffs, targeting key partners such as the European Union, Japan, and India, are expected to increase business costs as firms draw down on stockpiled inventory and resume purchases at higher rates.

The Commerce Department’s report showed significant increases in imports of industrial supplies and consumer goods, while the US goods trade deficit with China grew by $5.3 billion to $14.7 billion in July.