Trade deficit grew 24% in July as Trump rebuilds tariffs; trade gap is down 30% this year

By Tom Howell Jr. - The Washington Times - Thursday, September 3, 2026

The U.S. trade deficit grew to $88.6 billion in July, a 24% increase from June, as the country imported goods to fuel the artificial intelligence boom and President Trump worked to rebuild his tariff framework after legal setbacks.

The Commerce Department said the U.S. exported $310.7 billion worth of goods, or 2.1% less than in June, and imported $399.3 billion, a 2.8% monthly increase.

Technology drove imports, with computers, computer accessories and semiconductors combining for a $14 billion increase over June.

The AI boom is creating massive demand for computer chips and other computing equipment, even as it stirs debate over tech’s role in society and whether communities should host electricity-gobbling data centers.

Mr. Trump is encouraging the AI boom, saying the U.S. can’t afford to fall behind rival nations.

The trade deficit measures the gap between what U.S. producers sell overseas and the value of goods brought in from abroad.

The rich American market tends to buy a higher value in goods from elsewhere — say, cheap consumer goods from China, luxury cars from Germany and cheese from Italy — than the amount other countries purchase from the U.S.

Mr. Trump says trade deficits are bad and amount to losses for the U.S., so he’s trying to close the gap through tariffs, or duties on foreign goods when they’re brought to U.S. markets.

Despite the widening deficit for July, his agenda showed progress in the long view.

So far this year, the goods and services deficit has dropped by $188.4 billion, or nearly 30%, compared with the same period last year.

Mr. Trump is hoping to eliminate the trade deficit through a new batch of tariffs on dozens of countries over unfair trade practices or their lax enforcement of forced-labor rules and other provisions.

The U.S. and Canada are steeped in a trade war after negotiations fell apart over competing demands. Mr. Trump imposed 50% tariffs on a batch of Canadian goods, and Ottawa retaliated with “dollar-for-dollar” levies.

Critics of Mr. Trump’s tariff project say the duties raise prices for Americans, as importers pass the costs to consumers, or say trade deficits are not inherently bad, since Americans may prefer overseas products or benefit from lower prices on those goods.

The Trump administration says tariffs are an effective tool for bringing manufacturing to U.S. shores and protecting domestic industries while reaping revenue for the Treasury that will chip away at the massive national debt.

“What you’re going to see is targeted, thoughtful tariff policy that basically says, if you build here, you don’t pay,” Commerce Secretary Howard Lutnick said on CNBC this week. “But if you don’t build here, expect to pay to enter the greatest market in the world.”