U.S. Trade Deficit Crashes Following Trump Tariffs

The United States’ trade deficit sharply narrowed in June thanks to Donald Trump’s tariffs, as American consumers bought drastically fewer goods from the nations Trump is trying to negotiate with.  

In June, the trade deficit fell from $96.4 billion to $86.0 billion, while a deficit of $99 billion was expected.While exports slightly reduced by 0.4%, likely due to reciprocal tariffs, to $178.2 billion, imports significantly reduced by 4.2% to $264.2 billion. 

Trump set an August 1st deadline for countries to make deals with the U.S., and the entire European Union was the latest to cut a deal. Amid other conditions, the EU agreed to purchase $750 billion worth of energy from the U.S., and invest $600 billion in the U.S., above their current purchases and investments. 

Trump has also made deals with the U.K., Vietnam, Indonesia, Japan, and the Philippines. The U.S. and China also reduced tariffs against one another. 

The Treasury posted an unexpected $27 billion budget surplus in June amid record tariff revenues, though it must be noted that the timing of certain federal payments such as veterans’ benefits, supplementary security income, and Medicare, was shifted from June to May because June 1 fell on a Sunday, and there would’ve been a $71 billion deficit without that.