❓WHAT HAPPENED: The U.S. goods trade deficit narrowed sharply in June, exceeding economists’ expectations, as imports fell significantly.
👤WHO WAS INVOLVED: The U.S. Commerce Department reported the data, with economists and analysts tracking the trade balance.
📍WHEN & WHERE: The report was released Tuesday, covering trade activity in June 2025.
🎯IMPACT: The narrowing deficit is expected to boost second-quarter GDP, with a smaller trade gap reducing its drag on economic growth.
A sharp drop in imports drove a significant narrowing in the U.S. trade deficit in June, with impacts particularly seen in consumer goods. The Commerce Department published data on Tuesday that shows the trade gap in goods narrowed to $86.0 billion, down from $96.4 billion in May—suggesting that President Donald J. Trump’s tariffs are successfully rebalancing the economy in favor of American producers. Economists had projected a deficit of an estimated $99 billion.
U.S. exports dropped only 0.6 percent to $178.2 billion, while imports dropped 4.2 percent to $264.2 billion. The drop in imports was primarily driven by a 12.4 percent drop in consumer goods imports. Notably, the slide in consumer goods imports—a category that includes items such as apparel, electronics, and household products—was the largest month-to-month decline seen in over a year.
The importation of industrial materials fell by 5.5 percent, while automotive part imports fell by a more modest 2.0 percent. Economists now expect the falling U.S. trade deficit to boost the 2nd Quarter gross domestic product (GDP), with an initial estimate set to be published in August.
Year-over-year data shows that the goods trade deficit fell by approximately 13 percent, or $12.8 billion. Meanwhile, exports rose 3.6 percent, with imports sliding 2.5 percent.
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