Trade Deficit Leaps 24.4 Percent, Highest On Record Excluding Tariff Distortions

Tariffs did not and will not fix the trade deficit.

The full Census Report on Trade (goods and services) for July shows the trade deficit leaped by 24.4 percent.

Exports, Imports, and Balance

July exports were $310.7 billion, $6.6 billion less than June exports.
July imports were $399.3 billion, $10.8 billion more than June imports.
The July increase in the goods and services deficit reflected an increase in the goods deficit of $17.6 billion to $119.6 billion and an increase in the services surplus of $0.2 billion to $31.0 billion.
The deficit increased 24.4 percent from June.

Three-Month Trade Averages

The average goods and services deficit increased $11.9 billion to $78.5 billion for the three months ending in July.
Average exports decreased $6.4 billion to $316.0 billion in July.
Average imports increased $5.5 billion to $394.5 billion in July.

Ignoring the front-running surge in imports ahead of Trump’s liberation day tariffs, the deficit is the largest in history, eclipsing the March 2022 balance of -117,797 billion.

This sharp post-tariff deterioration underscores that the “Liberation Day” duties ultimately failed to fix long-term trade imbalances.

While the deficit temporarily shrunk in mid-2025 when the tariffs cratered import volumes, the underlying structural issues remained.

Following the Supreme Court’s striking down of the tariffs, imports have aggressively rebounded, while manufacturing construction spending has simultaneously plunged 32.6% over the last two years.