The reduction in the trade deficit was driven by a significant drop in imports as companies had stocked up inventory in previous months in anticipation of tariffs.
The decline in goods imports accounted for nearly all of the decrease in the trade deficit, with a 3.7% fall impacting the pharmaceutical, automotive, and oil sectors. These sectors were either threatened or faced tariffs, or experienced a drop in production prices.
U.S. exports also fell, albeit to a lesser extent (-0.5%), with the decline mainly affecting gold and metals.
In the first half of the year, the U.S. trade deficit increased by $161.5 billion (38.3%) compared to the same period in 2024. This data was released just days before the reciprocal tariffs imposed by President Donald Trump on trading partners were set to take effect.
