US trade deficit in July tops highest level since before 'Liberation Day'

The US trade deficit in goods and services ballooned in July as imports shot up and exports fell around a changeover in President Trump's tariffs and a rebound in AI data center-related imports.

The total gap: $88.6 billion, a whopping 24.4% change from $71.2 billion in June.

The trade deficit is now at its highest since March 2025, when importers stocked up ahead of Trump's "Liberation Day" on April 2 of that year.

The new data released Thursday by the Commerce Department's Bureau of Economic Analysis showed yet another pivot in global trade, following a downtick in the trade deficit in June attributed by some to a "World Cup effect."

July's jump came in a news-filled month for shippers. Trump's new phase of global tariffs took effect , and a ceasefire between the US and Iran broke down , leading to renewed attacks and shipping constraints in the Strait of Hormuz.

Imports in total jumped 2.8% in July against a 2.1% decrease in exports. The US sent out $310.7 billion in exports against $399.3 billion in imports.

Capital Economics noted that "sharp rebounds in AI-related goods imports" were a key factor in the widened gap, which could be good news for that sector, "pouring cold water on the idea that the AI buildout may already be losing momentum."

Grace Zwemmer, the US Economist at Oxford Economics, echoed that the AI spending surge may be good for the economy but the overall numbers show that "risks are (tilted) toward a stronger drag from net trade," including a possible "sizeable drag on Q3 GDP."

The July results also appeared to show some importers stocking up ahead of anticipated tariff uncertainty. New tariffs went into effect on July 24 , and duties could increase further in the months ahead if Trump's team follows through with plans for additional duties.

The tariffs Trump leveled in late July included a 10% tariff on top allies like the European Union and a 12.5% rate on other nations, including China. Trump and his team appear to have more planned, with Raymond James recently warning clients, "We continue to believe the U.S. has not yet reached 'peak tariff.'"

Another driver in July's numbers: decreased crude oil exports, which dropped $4.5 billion on a month-over-month basis. The fall in exports was also due in part to a drop in non-monetary gold exports.

On the other side of the ledger, demand around the ongoing AI data center build-out was the clear driver of higher imports. Computer imports surged by 25% month over month, with computer accessories up by 33% and semiconductors up 10%.