The U.S. trade deficit in goods and services grew to the biggest gap in 16 months in July, as America imported more electronics to feed the country’s artificial intelligence boom.
The monthly trade deficit, the gap between what the United States imports and what it exports, hit $88.6 billion in the month, according to data the Commerce Department released on Thursday. That was an increase of more than 24 percent compared with June.
Imports grew 2.8 percent from the previous month, to $399.3 billion, driven by surging imports of computers, computer accessories and semiconductors. U.S. exports fell 2.1 percent compared with June, hitting $310.7 billion, as the United States exported less gold and crude oil.
President Trump has imposed steep tariffs on foreign goods in an effort to reduce the trade deficit, which he sees as a sign of America’s manufacturing weakness. The Supreme Court struck down many of Mr. Trump’s global tariffs in February, but he has turned to other laws to replace them.
In July, the administration put a new round of tariffs on more than 80 countries, and it is considering placing another round of tariffs on more than 40 countries in the coming weeks.
The trade balance in July was the largest deficit since Mr. Trump began imposing tariffs in earnest. The figure is also larger than the average monthly trade deficit in the year before Mr. Tump was elected.
Many economists have questioned how good of a tool tariffs are for reducing the trade deficit. Some have pointed out that, although some categories of imports have fallen, expensive foreign-made chips and computers that are needed to construct new data centers have driven up imports and the trade deficit.
In July, imports of capital goods, the category that includes computers, hit the highest level on record. The U.S. trade deficit with Taiwan, a major manufacturer of chips, also hit a record $20.7 billion in July. Deficits with Mexico, Vietnam, Thailand and South Korea also climbed.
The administration has exempted chips, smartphones and other electronics from its tariffs for more than a year. Officials have been reluctant to slow data center construction, which is driving U.S. investment and growth in the stock market.
Administration officials say that tariffs on chips are coming soon, but they are widely expected to contain significant carve outs for companies that are building new chip facilities in the United States.
The war in Iran has also made trade particularly volatile this year, as the closure of the Strait of Hormuz scrambled supply chains for oil, fertilizer, product packaging and helium. U.S. petroleum exports have grown, though in July they fell back from higher levels the prior month.
https://www.nytimes.com/2026/09/03/business/economy/us-trade-defecit-july.html