Trade deficit hits $105.6 billion, largest since just before Trump adopted tariffs last year

The US trade deficit widened sharply in August due to an influx of goods linked to the development of artificial intelligence and the vagaries of import customs duties, the Commerce Department reported on Tuesday.

Imports increased by 4.3% over the month, bringing the total imbalance to $105.6 billion. That represents a 13.7% jump from July and is above the Dow Jones consensus estimate of $102 billion.

It is also the largest deficit since the historic gap in March 2025, recorded just before President Donald Trump announced “liberation day” for “reciprocal” tariffs against the United States’ trading partners.

Although the monthly total was up, the year-to-date deficit of $138.2 billion was down nearly 20% from the same period last year.

“Rising prices overestimate these movements, but net trade is still expected to weigh on GDP growth in the third quarter,” said Oren Klachkin, financial economist at Nationwide. “We view this as a sign of strong domestic demand, not economic weakness.”

As a general rule, imports generally subtract gross domestic product calculations. However, if imports reflect stronger demand and consumption, they may be offset elsewhere.

Nonetheless, Goldman Sachs lowered its tracking estimate for third-quarter economic growth to 3.1%, down 0.3 percentage points from its previous estimate. The Atlanta Federal Reserve’s GDPNow tracker lowered its estimate to 3.7% following the trade report, down 0.1 percentage points from the last update.