U.S. Goods Trade Deficit Balloons in July, Largest Since March ’25
Summary
- Deficit: $118.8 bil. in July, up $17.4 bil. (+17.2%) from June’s $101.4 bil.
- Exports -2.9%, third straight m/m decline to a six-month low, driven by an 11.2% drop in industrial supplies & materials exports.
- Imports +3.7%, fifth rise in six mths. to highest level since Mar. ’25, led by an 11.3% rebound in nonauto capital goods imports.
The U.S. international trade deficit in goods unexpectedly expanded to $118.81 billion in July, the biggest since March 2025, from $101.41 billion in June and $105.33 billion in May, according to the advance estimate from the U.S. Census Bureau. The July reading marked the second widening in the goods trade deficit in three months, exceeding a $101.28 billion shortfall in July 2025. A deficit of $99.5 billion for July had been expected by the Action Economics Forecast Survey. The deficit reached a low of $61.44 billion in October 2025 (the smallest since February 2020) and a record high of $158.73 billion in March 2025.
In Q2'26, the goods trade deficit widened to $288.96 billion after narrowing to $245.88 billion in Q1'26; the monthly deficit averaged $96.32 billion in Q2'26, the largest since Q1'25, up from $81.96 billion in Q1'26. In real terms, the goods trade deficit subtracted 1.00%-point from real GDP growth in Q2'26 after having subtracted 0.41%-point in Q1'26.
Total goods exports fell 2.9% m/m (+11.7% y/y) to $199.37 billion in July, the third consecutive monthly fall and the lowest level since January, after a 1.8% decline to $205.41 billion in June. A record high of $220.11 billion was reached in April. However, exports were up 22.6% from a June 2023 low. The m/m decline in exports in July was led by an 11.2% drop (+18.4% y/y) in industrial supplies & materials, followed by decreases of 3.5% (+4.7% y/y) in other goods, 1.4% (+10.1% y/y) in foods, feeds & beverages, and 0.7% (+1.0% y/y) in automotive vehicles & parts. To the upside, exports of nonfood consumer goods excluding autos (+8.1%; +0.2% y/y) and capital goods excluding autos (+2.9%; +13.1% y/y) rose m/m in July.
Total goods imports rebounded 3.7% m/m (13.7% y/y) to $318.18 billion in July following a 2.4% decline to $306.81 billion in June, marking the fifth monthly increase in six months and the highest level since March 2025’s record high of $340.11 billion. Imports were up 26.9% from a March 2023 low. The m/m rise in imports in July was led by an 11.3% rebound (46.9% y/y) in capital goods excluding autos, with a marginal 0.1% increase (-1.7% y/y) in nonfood consumer goods excluding autos. In contrast, imports of industrial supplies & materials (-3.9%; -11.7% y/y), automotive vehicles & parts (-1.6%; +3.9% y/y), foods, feeds & beverages (-0.9%; -4.2% y/y), and other goods (-0.4%; +10.0% y/y) fell m/m for the second successive month in July.
The advance international trade data can be found in Haver's USECON database. The expectation figure is from the Action Economics Forecast Survey, which is in AS1REPNA.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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