Imports surge, U.S. trade deficit widens to largest in four months.

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The U.S. trade deficit widened sharply in July to a four-month high, mainly because companies rushed to buy goods and raw materials before President Trump announced a new round of tariffs on global trade partners.

Data released by the U.S. Commerce Department on Thursday showed that the trade deficit in goods and services widened by nearly 33% in July from the previous month to $78.3 billion. This figure was slightly higher than the median forecast of about $78 billion deficit in a survey of economists.

Imports in July rose 5.9%, the largest increase since the beginning of this year, while exports edged up slightly. These figures are not adjusted for inflation.

This surge in imports reflects that U.S. companies are eager to stock up on more goods ahead of the so-called "reciprocal tariff rates" taking effect on a range of countries that have yet to reach a trade agreement with the U.S. This has created significant volatility in trade data and also affected GDP calculations.

Import Data Highlights Companies' Early Moves

The growth in imports in July was broad-based. Among them, inbound shipments of industrial supplies rose to the highest level in four months, and imports of consumer goods also climbed. In addition, imports of capital equipment excluding automobiles posted the largest gain since the beginning of the year.

Looking deeper, the surge in imports of industrial supplies was largely due to a sharp increase in non-monetary gold imports. The U.S. Bureau of Economic Analysis uses a separate accounting method for including gold in GDP calculations.

This import boom is not an isolated case; it clearly illustrates the strategies adopted by U.S. companies to cope with the threat of tariffs. Before April 2, companies had also imported on a large scale in the first quarter to "act early," causing inventory build-up. Subsequently, U.S. imports declined for three consecutive months until the surge reappeared in July. This cyclical, concentrated procurement to avoid tariffs has become a key driver of significant fluctuations in U.S. trade data this year and has directly affected government measurement of economic activity.

In terms of bilateral trade, the U.S. deficit with major trading partners generally widened. The July report showed that after narrowing for six consecutive months, the U.S. goods trade deficit with China widened for the first time. At the same time, the deficit with Mexico widened slightly, and the goods trade deficit with Canada also widened after hitting its lowest level since 2020 in June.

Excluding price factors, the inflation-adjusted goods trade deficit widened to $100.1 billion in July, having previously hit a record high earlier this year.

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