(Bloomberg) — The US trade deficit decreased in August as various tariffs introduced by President Donald Trump took effect, according to official data released on Wednesday after a delay caused by a government shutdown.
The trade gap for goods and services fell by nearly 24% from the previous month to $59.6 billion, as reported by the Commerce Department. Economists surveyed by Bloomberg had predicted a deficit of $60.4 billion.
The trade report was originally set to be released on October 7 but was postponed due to the longest federal government shutdown, which just recently ended. The updated release date for the September trade data, initially scheduled for November 4, has not yet been announced.
In August, the value of US imports dropped by 5.1%, marking the largest decline in four months, while exports saw a slight increase. These figures are not adjusted for inflation.
The previous month, the trade deficit had widened as companies rushed to import goods ahead of reciprocal tariffs that were initially announced in April. These tariffs were postponed for several months while some countries negotiated with the US, and many of these agreements took effect in August.
The significant fluctuations in trade this year have caused similar volatility in the government's economic activity measurement, known as gross domestic product (GDP). Before the August data, the Federal Reserve Bank of Atlanta’s GDPNow forecast indicated that net exports would contribute 0.57 percentage points to the GDP for the third quarter.
In a separate announcement, the Census Bureau stated on Wednesday that it will release the September retail sales report on November 25, and data on durable goods orders for the same month on November 26.
The drop in imports was primarily driven by a significant decrease in shipments of nonmonetary gold. This decline was due to a sharp increase in tariffs on gold imports from Switzerland, a major gold exporter. Consequently, the US deficit with Switzerland considerably narrowed in August, and the two countries have since reached an agreement to lower these import duties.
US imports of capital goods, such as computer accessories and communications equipment, also fell in August.
After adjusting for inflation, the merchandise trade deficit decreased to $83.7 billion in August, the smallest figure recorded since the end of 2023.
The August report indicated that the merchandise trade shortfall with China widened, reaching the largest level since April, while the deficit with Mexico dropped slightly and the shortfall with Canada also decreased.