The trade deficit of the United States (U.S.) decreased by 16% in June, reaching 60.2 billion dollars, which represents the lowest level since September 2023, according to data from the Bureau of Economic Analysis of the U.S. Department of Commerce. A key factor was a significant reduction in imports of consumer goods, while the trade deficit with China fell to the lowest level in more than 21 years.
Total exports of goods and services in June amounted to 277.3 billion dollars, while total imports fell to 337.5 billion dollars, down from 350.3 billion dollars in May.
The reduced trade deficit gave a strong contribution to the growth of the U.S. gross domestic product (GDP) in the second quarter, which grew at an annual rate of 3.0%, after a contraction of 0.5% in the first quarter. That growth is mainly the result of prior “pre-purchasing” behavior by consumers and companies ahead of the introduction of new tariffs by President Donald Trump.
Last week, ahead of the self-imposed deadline of August 1st, Trump issued a series of announcements about new tariffs for dozens of trade partners. Starting August 7th, tariff rates for imports into the U.S. will range between 10% and 41%. According to estimates by the Yale Budget Lab, the average U.S. tariff rate now stands at 18.3%, the highest since 1934, compared to the previous range of 2% to 3% before Trump returned to the White House in January.
A drop in the trade deficit with China
Especially notable is the drastic drop in the deficit with China, which in June decreased by a third, to 9.5 billion dollars, the lowest level since February 2004. Over the past five months, this deficit has been reduced by 22.2 billion dollars, which represents a total decrease of 70%.
U.S. and Chinese trade negotiators recently met in Sweden to continue negotiations amid an intensified trade war. The U.S. currently applies a 30% tariff on most Chinese imports, which has resulted in a decline in imports from China to 18.9 billion dollars, the lowest level since 2009.
Negotiators have recommended to President Trump to extend the deadline for the expiration of current tariffs (August 12th), in order to avoid their automatic increase above 100%, as happened earlier this year.
“We are very close to an agreement,” President Trump said in an interview. “We’re getting along very well with China.”, N1 writes.
