Key facts
- The U.S. trade deficit widened by 24.4% to $88.6 billion in July.
- Imports rose 2.8% to $399.3 billion, with capital goods imports hitting a record $140.3 billion.
- The surge in capital goods imports is linked to investments in AI data centers, including computers, accessories, and semiconductors.
- Exports decreased by 2.1% to $310.7 billion.
- The goods trade deficit widened by 17.3% to $119.6 billion.
- Trade is expected to subtract from U.S. economic growth in the third quarter.
The U.S. trade deficit widened significantly in July, reaching $88.6 billion, a 24.4% increase from the previous month. This deterioration was primarily driven by a record surge in imports of capital goods, totaling $140.3 billion, which is strongly linked to the ongoing buildout of artificial intelligence data centers. Imports of computers, semiconductors, and related accessories saw substantial increases. Despite a drop in imports of industrial supplies and materials, the overall import figures climbed 2.8% to $399.3 billion. Exports, however, declined by 2.1% to $310.7 billion, with notable decreases in industrial supplies and crude oil. The goods trade deficit alone expanded by 17.3% to $119.6 billion. This widening trade gap is expected to act as a drag on U.S. economic growth in the third quarter, following trade's subtraction of 1.14 percentage points from GDP in the April-June period.