The US trade deficit narrowed in June, contracting 5.6 per cent to $73.3 billion, as both imports and exports declined, according to Commerce Department data released on 4 August 2026.
The narrowing came from May’s $77.6 billion reading, broadly in line with market expectations, as imports declined more sharply than exports. Imports fell 1.8 per cent to $388.0 billion, driven by lower purchases of capital goods and consumer goods, particularly computers and pharmaceuticals, while exports fell 0.9 per cent to $314.7 billion, reflecting weaker shipments of industrial supplies including crude and fuel oil.
Imports fell for the first time since the start of the year in a broad decline. The government had estimated the previous week that the trade gap subtracted a full percentage point from GDP growth in the second quarter. Priscilla Thiagamoorthy, Senior Economist at BMO Capital Markets, called it a welcome narrowing but cautioned that net exports would likely continue subtracting from GDP growth in the quarters ahead.
The US recorded record goods trade deficits with Mexico, Vietnam and South Korea in June, while the goods deficit with China widened to $15.3 billion from $14.5 billion in May, underscoring that the deficits have persisted despite aggressive US import tariffs. Analysts noted the trend is unlikely to be sustained given an ongoing artificial intelligence infrastructure buildout that remains heavily reliant on imports.
Source: Reuters
