The U.S. Commerce Department reported that the trade deficit widened to $88.6 billion in July, the largest gap since early 2025. The shortfall in goods and services rose 24.4% from June, driven by a 2.8% increase in imports and a 2.1% decline in exports.
Imports of capital goods – excluding automobiles – surged 11.4%, the strongest increase in the category since 1993. The jump reflects higher purchases of computers, accessories, semiconductors and telecommunications equipment, which analysts link to ongoing investment in artificial‑intelligence infrastructure.
The report noted that recent fluctuations in the deficit have been influenced by higher global demand for U.S. petroleum products amid the Iran conflict and by American firms’ efforts to resolve lingering supply‑chain bottlenecks.
In parallel, the United States imposed 50% duties on billions of dollars of Canadian goods after trade talks stalled last month, prompting a retaliatory response from Canada. The Trump administration continues to rely on various legal authorities to levy duties following a Supreme Court ruling earlier this year that struck down many existing tariffs.
