Trade Gap Widens 24% to $88.6 Billion in July as Capital-Goods Imports Hit a Record

by Tomas Ferreira · September 3, 2026

Markets Reporter, US Market Current

The U.S. trade deficit widened 24.4% from the prior month to $88.6 billion in July, according to the international trade report released Thursday morning and covered by Reuters. The June gap was originally reported at $73.3 billion in the release published Aug. 4 and is subject to revision in Thursday's figures. Economists had expected a slightly larger gap of $90 billion.

The move was lopsided. Total imports rose 2.8% to $399.3 billion while total exports fell 2.1% to $310.7 billion. On the goods side, imports climbed 3.7% to $320.6 billion and exports dropped 3.0% to $201 billion, pushing the goods deficit up 17.3% to $119.6 billion.

Services ran the other way but on a much smaller scale: services exports slipped $0.4 billion to $109.7 billion and services imports fell $0.6 billion to $78.7 billion.

The AI import line

One category did most of the work. Capital-goods imports rose $14.4 billion to $140.3 billion, which Reuters described as a record high for the series, driven by computers, computer accessories and semiconductors — the physical inputs of the data-center buildout.

Bloomberg's account of the same release, republished by Transport Topics, put the capital-goods increase at 11.4% and called it the largest advance since 1993, with computer accessories alone up $6.6 billion, described in that report as the most on record. Bloomberg also characterized the overall deficit as the largest since early 2025.

The country detail complicates the tariff story. Despite steep duties, the United States recorded record goods trade deficits with Mexico, Vietnam, Taiwan, Thailand, South Korea and Malaysia in July, according to Reuters — a list that maps closely onto the electronics and semiconductor supply chain.

Tariffs, minus some of the tariffs

The policy backdrop shifted during the year. The Bloomberg report carried by Transport Topics says that while many tariffs were struck down by the Supreme Court earlier this year, the administration is using other authorities to impose duties; by that account the U.S. levied 50% duties on billions of dollars of Canadian goods, and Canada retaliated after trade talks fell apart last month. That report does not detail which tariffs the Court addressed or on what grounds.

That churn has made the monthly trade series unusually noisy, with importers repeatedly pulling shipments forward or holding them back around announced deadlines. The longer view still shows a narrower gap than last year: through June, the year-to-date deficit was $189.3 billion, or 33.8%, smaller than the same period of 2025, according to the June trade release from the Census Bureau and the Bureau of Economic Analysis.

What it does to the GDP arithmetic

For growth accounting, the number that matters is the inflation-adjusted goods deficit, which rose 12.7% to $106.4 billion in July. Trade subtracted 1.14 percentage points from GDP growth in the April-June quarter, when the economy expanded at a 1.5% annualized rate, Reuters noted.

The third quarter is tracking worse on that specific line. The Atlanta Fed's GDPNow model showed net exports subtracting 1.34 percentage points from third-quarter GDP, per the Transport Topics report, which described that as the most since the start of 2025. That report does not give the vintage date of the GDPNow reading, and the model is revised with each new data release.

That drag is partly an accounting artifact rather than a pure loss of output. Imported capital equipment is subtracted in the trade account but shows up again as business fixed investment when it is installed, so a surge in imported servers and semiconductors can depress the net-exports contribution while adding to another component of the same GDP figure. How much of July's import wave lands in domestic investment versus inventories will not be clear until later revisions.

Into a busy week

The trade figures landed the same morning as weekly jobless claims of 206,000 and an ISM Services PMI of 55.4% for August, a combination that left rate expectations broadly intact. InvestingLive put market-implied odds of a September Federal Reserve rate increase at 58% in a post timestamped 08:11 UTC Thursday. The Federal Open Market Committee, which has held its target range at 3.50% to 3.75% since a 9-3 vote on July 29, next meets Sept. 15-16.

The Labor Department's August employment report is scheduled for Friday morning and has not yet been released. Stocks rose on Wednesday, with TheStreet describing the S&P 500 and the Dow as jumping after back-to-back losing days, and reporting that the 10-year Treasury yield touched an intraday high of 4.814% that session, its highest level since November 2023 by that account.