US Goods Trade Deficit Falls to Lowest Level in Nearly Two Years
July 29, 2025133 ViewsRead Time: 2 minutes
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The deficit in US goods trade fell to its lowest level in nearly two years in June amid a decline in imports, bolstering economists' expectations that trade will account for a significant portion of the expected economic growth in the second quarter.
Despite the unexpected decline announced by the Department of Commerce on Tuesday, economists may raise their estimates for the GDP of the previous quarter, but the sharp drop in imports indicates a slowdown in domestic demand.
The influx of imports, due to companies rushing to import before higher tariffs are imposed on foreign goods, led to a 0.5% annualized decline in GDP from January to March, the first drop in output in three years.
President Donald Trump's administration has announced several trade deals that economists say may help alleviate the uncertainty.
Chief US economist at Oxford Economics, Matthew Martin, said: "With the easing of policy uncertainty, imports and exports may start to reach their lowest levels in the second half of the year and become less volatile."
The Commerce Department's Census Bureau said on Tuesday that the goods trade deficit shrank by 10.8% to $86 billion last month, the lowest level since September 2023.
According to a Reuters survey, economists expected the goods trade deficit to rise to $98.20 billion.
Despite the unexpected decline announced by the Department of Commerce on Tuesday, economists may raise their estimates for the GDP of the previous quarter, but the sharp drop in imports indicates a slowdown in domestic demand.
The influx of imports, due to companies rushing to import before higher tariffs are imposed on foreign goods, led to a 0.5% annualized decline in GDP from January to March, the first drop in output in three years.
President Donald Trump's administration has announced several trade deals that economists say may help alleviate the uncertainty.
Chief US economist at Oxford Economics, Matthew Martin, said: "With the easing of policy uncertainty, imports and exports may start to reach their lowest levels in the second half of the year and become less volatile."
The Commerce Department's Census Bureau said on Tuesday that the goods trade deficit shrank by 10.8% to $86 billion last month, the lowest level since September 2023.
According to a Reuters survey, economists expected the goods trade deficit to rise to $98.20 billion.
