The U.S. trade deficit decreased significantly in June, largely because American businesses imported fewer goods in the face of President Donald Trumps tariffs, according to new data from the Department of Commerce.
The overall trade gap narrowed by 16 to 60.2 billion, which was a larger drop than analysts had predicted. This decline was driven by a 3.7 fall in imports, while exports also saw a modest decrease of 0.5.
The drop in imports was particularly noticeable in consumer goods, industrial supplies, and auto parts. These declines came as businesses began to feel the impact of the 10 tariffs that Trump imposed on most trading partners in April, along with steeper duties on specific products like steel and aluminium.
Financial markets economist Oren Klachkin noted that the policy uncertainty has eased somewhat since the government laid out plans for even higher tariff rates to take effect.
However, he warned that businesses must now adjust to the reality that tariffs are here to stay, and their negative impact will likely outweigh any benefits from reduced uncertainty.