U.S. trade deficit widens more than expected as imports surge

The United States trade deficit widened more than expected in July, according to official data released on Thursday (4), due to a surge in imports just before new tariffs came into effect.

According to the Department of Commerce, the overall trade deficit rose 32.5% in July, reaching US$78.3 billion (R$439 billion at July’s exchange rate).

In that month, imports increased by 5.9%, totaling US$ 358.8 billion (R$ 2 trillion), while exports grew only 0.3%, reaching US$ 280.5 billion (R$ 1.6 trillion).

Briefing.com, based on a consensus of analysts, had forecast a much smaller negative balance of US$64.2 billion (R$360 billion).

Analysts at Pantheon Macroeconomics believe the growing trade deficit is linked to “another wave of pre-tariff movements.”

In April, President Donald Trump imposed a 10% tariff on almost all of the United States’ trading partners but twice postponed its implementation until early August, as part of a plan to increase these tariffs on dozens of economies, including strategic partners such as the European Union, Japan, and India.

According to analysts, companies that increased their imports to get ahead of the tariffs are now depleting their inventories, suggesting they will likely need to make new purchases at higher costs.

Commerce Department data show that industrial supplies and consumer goods were among the sectors that saw the largest increases in imports.

The trade deficit with China rose by US$ 5.3 billion (R$ 30 billion) in July, reaching US$ 14.7 billion (R$ 82.3 billion).

Mexico, with a surplus of US$16.6 billion (R$93 billion), and especially Vietnam, with a surplus of US$16.1 billion (R$90.2 billion), stood out as the countries that benefited most from the reorientation of trade flows toward the U.S.

The deficit with the European Union continued to narrow, falling to US$8.6 billion (R$48.1 billion).

Source: Isto É Dinheiro

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