The US trade deficit fell nearly 24% in August as Trump’s tariffs reduced imports

WASHINGTON (AP) — The U.S. trade deficit fell by about 24% in August as sweeping global tariffs imposed by President Donald Trump depressed imports.

In a report delayed by more than seven weeks due to the federal government shutdown, the Commerce Department said Wednesday that the gap between what the United States buys from other countries and what it sells to itself fell to $59.6 billion in August, from $78.2 billion in July.

Imports of goods and services fell 5% to $340.4 billion in August compared to July when U.S. companies were stockpiling foreign products before Trump finalized taxes on products from nearly every country on Earth. These fees went into effect on August 7.

US exports rose 0.1% in August to $280.8 billion.

Trump, who charged that America’s persistent trade deficit meant that other countries took advantage of the United States, overturned decades of US policy in favor of free trade, imposing tariffs higher than 10% on imports from most countries and targeting specific products, including steel, copper and cars, with their own tariffs.

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However, the US trade deficit is high so far in 2025, at $713.6 billion through August, up 25% from $571.1 billion in January-August 2024.

Lower imports and trade deficits are good for economic growth because foreign products are subtracted from the country’s GDP. GDP is the output of goods and services in a country.

“A smaller trade deficit in August will be a tailwind to real GDP for the third quarter, because it means more U.S. expenditures were directed toward domestically produced goods and services rather than foreign goods and services,” Bill Adams, chief economist at Comerica Bank, wrote in a commentary. “Although this release is very outdated due to the government shutdown, it contributes to providing evidence that the economy was growing rapidly in the third quarter.”

The tariffs, which Trump says will protect American industries and attract factories to America, are paid by importers who typically try to pass the higher cost on to their customers. Economists say Trump’s tariffs are one reason US inflation remains stubbornly above the Federal Reserve’s 2% target.

After voter dissatisfaction with rising costs of living led to big gains for Democrats in the Nov. 4 election, the president relented and dropped tariffs last week on beef, coffee, tea, fruit juice, cocoa, spices, bananas, oranges, tomatoes and some fertilizers, saying they “may, in some cases,” have contributed to higher prices.

Its definitions also face a legal challenge that has gone to the Supreme Court. At the hearing on November 5, the justices appeared skeptical that the president has the authority to bypass Congress and impose unlimited tariffs on most imports once he declares a national emergency.

AP Writer Josh Bok contributed to this report.