The US trade deficit narrowed by about 24 per cent in August as sweeping tariffs imposed by President Donald Trump reduced imports, according to a delayed Commerce Department report released Wednesday. According to Associated Press, citing the report, the trade gap fell to $59.6 billion in August from $78.2 billion in July. Imports declined 5 per cent to $340.4 billion as businesses slowed purchases from abroad after stockpiling goods ahead of tariffs that took effect on August 7. Exports rose 0.1 per cent to $280.8 billion. Trump has upended decades of US free-trade policy by levying broad duties on most trading partners as well as on products such as steel, copper and automobiles. He argues that chronic trade deficits reflect foreign nations exploiting the US. Economists say tariffs are contributing to inflation by raising costs that importers largely pass to consumers. Despite August’s pullback, the trade deficit has widened in 2025, reaching $713.6 billion through August — up 25 per cent from $571.1 billion in the same period last year. A narrower trade gap typically supports economic growth because imports subtract from gross domestic product. “August’s smaller trade deficit will be a tailwind for third-quarter real GDP, since it means more US spending went to domestically-produced goods and services,” said Bill Adams, chief economist at Comerica Bank. The release was delayed due to the government shutdown. Public anger over living costs contributed to Democratic gains in the November 4 elections. Days later, Trump rolled back tariffs on items such as beef, coffee, tea, fruit juice, cocoa, spices, bananas, oranges, tomatoes and some fertilisers, acknowledging their effect on prices. The Supreme Court is weighing the legality of the tariffs. During a November 5 hearing, justices questioned whether a president can impose open-ended duties under emergency powers without approval from Congress.
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