U.S. Trade Deficit Narrows by 24% in August Amid Tariff Impacts

Economy

U.S. Trade Deficit Narrows by 24% in August Amid Tariff Impacts

2 weeks ago

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REUTERS

LATIMES

FORBES

INDIATIMES

U.S. Trade Deficit Narrows by 24% in August Amid Tariff Impacts

Credited from: LATIMES

The U.S. trade deficit narrowed 24% to $59.6 billion in August, the lowest since October 2023.
Imports dropped 5.1%, while exports increased slightly by 0.1%.
This data release was delayed due to a government shutdown, initially scheduled for October 7.

The U.S. trade deficit significantly narrowed in August, falling by nearly 24% to $59.6 billion, attributed to decreased imports as tariffs imposed by President Donald Trump took effect. This decline marked the narrowest trade gap since October 2023 and exceeded economists' expectations, who anticipated a $60.3 billion deficit, according to Reuters, Los Angeles Times, Forbes, and India Times.

Imports decreased by 5.1% to $340.4 billion, the largest drop in four months, while exports saw a modest rise of 0.1% to $280.8 billion. This shift follows a trend where companies had previously accelerated imports ahead of significant tariffs, expected to impact various sectors, according to Reuters, Los Angeles Times, and Forbes.

The delayed report's release was due to a 43-day federal government shutdown, causing a postponement initially planned for October 7. Economists suggest this smaller deficit may positively influence third-quarter GDP growth, affirming it will serve as a tailwind for real economic output, according to India Times and Forbes.