The U.S. trade deficit surged in July to its highest level in four months as American businesses rushed to import goods ahead of expected tariff increases, the Commerce Department said Thursday.
The gap between what America sells abroad and what it buys from other countries jumped to $78.3 billion, a 32.5 percent increase from June’s revised $59.1 billion. It was the sharpest monthly deterioration in nearly a year.
The surge was driven almost entirely by imports, which climbed $20 billion to $358.8 billion, while exports rose just $800 million to $280.5 billion.
Much of the import increase reflected panic buying ahead of new tariffs announced by the Trump administration. Companies appeared to be stockpiling goods, particularly from Switzerland and China, before higher duties took effect.
Gold imports alone accounted for nearly half the monthly increase, surging $9.6 billion as traders rushed to bring in the precious metal before potential restrictions. Most of that gold came from Switzerland, pushing the trade deficit with that country up $7.6 billion to $7.7 billion.
The data captures a familiar pattern that has emerged during trade disputes: businesses front-loading shipments to beat tariff deadlines, creating dramatic swings in monthly trade figures.
Industrial materials led the broader import surge, rising $12.5 billion, while imports of machinery and equipment climbed $4.7 billion. Consumer goods imports also increased.
The trade deficit with China widened by $5.3 billion to $14.7 billion, the first increase in six months. Deficits also expanded with Mexico and other major trading partners.
The July deterioration threatens to weigh on economic growth in the third quarter, as a widening trade gap subtracts from gross domestic product calculations. The real trade deficit, adjusted for inflation, approached $100.1 billion, nearing record territory.
The volatile trade flows highlight how tariff policies continue to disrupt normal commerce patterns, even as some countries have negotiated exemptions from the higher duties.
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