The U.S. trade deficit surged to $78.3 billion in July—its highest level in four months—driven by a sharp spike in imports ahead of expected tariff increases. The Commerce Department reported Thursday that the gap jumped 32.5% from June’s revised $59.1 billion, marking the steepest monthly deterioration in nearly a year.
Businesses scrambled to import goods, particularly industrial materials, machinery, and gold, before tariffs announced by the Trump administration took effect. Imports rose by $20 billion to $358.8 billion, while exports edged up just $800 million to $280.5 billion.
A single category—gold imports—accounted for nearly half the monthly import increase. Traders brought in $9.6 billion in gold, mostly from Switzerland, pushing the trade deficit with that country from just $100 million in June to $7.7 billion in July. The surge reflects a familiar pattern during trade disputes: companies front-loading inventory to avoid rising tariffs.
The trade gap with China also widened for the first time in six months, increasing $5.3 billion to $14.7 billion. Deficits expanded with Mexico and several other trading partners as well.
The increase in imports was concentrated in industrial supplies and materials, up $12.5 billion, along with machinery, equipment, and consumer goods. These pre-tariff purchases are expected to distort third-quarter economic data by reducing net exports, which subtract from GDP growth.
Adjusted for inflation, the real trade deficit climbed to $100.1 billion—approaching record levels. The volatility underscores how tariff policy continues to disrupt traditional trade flows, even as some foreign governments have negotiated exemptions.
The Trump administration’s renewed focus on rebalancing trade through tariffs has driven sharp month-to-month fluctuations in the trade data, with importers racing to beat policy deadlines and stockpile goods. July’s numbers illustrate the scale of that impact as businesses brace for additional trade restrictions.
