The United States’ trade deficit with the rest of the world grew in July to the highest level seen in more than a year, prompting an indignant response from the Commander in Chief. The U.S. Census Bureau and Bureau of Economic Analysis announced Thursday that the deficit in goods and services increased by $17.4 billion month over month, from $71.2 billion in June to $88.6 billion in July. The country’s exports totaled about $310.7 billion, $6.6 billion less than the flow of goods to other countries seen in June, as the United States sold less crude oil and gold to its trading partners. Meanwhile, July imports totaled $399.3 billion, an increase of $10.8 billion from the previous month, driven mainly by technology such as semiconductors and computer parts, which are likely to contribute to growth in the artificial intelligence sector. Government data showed the goods deficit in particular rose from $17.6 billion to $119.6 billion, while the services surplus rose from $200 million to $31.0 billion. Regardless of the growing export deficit, White House deputy deputy press secretary Kush Desai described the news as “further proof that President Trump’s trade agenda is working.” Year-to-date figures show the goods and services deficit fell by $188.4 billion (29.6 percent) from the same period in 2025. Exports grew by 12 percent (a total of $237.2 billion), while imports rose by 1.9 percent, or $48.8 billion, during that time. “Imports of capital goods, the machinery and equipment we need to reindustrialize, accounted for the largest share of goods imports on record,” Desai wrote in a post on However, the deficit with Canada decreased to $3.2 billion, amid a tit-for-tat trade war that has dragged on for the past month. Canadian tariffs on American imports take effect on Tuesday, which will undoubtedly limit the flow of American-made goods north, so that victory may be short-lived. There is little historical evidence that the administration’s trade platform has materially decreased the deficit or that the year-and-a-half strategy will produce such results in the future. The July 2026 deficit is larger than the average monthly deficit seen in 2024, before Trump was elected, and is the largest seen since “Liberation Day” in April 2025, when the tariffs first went into effect. Trump, for his part, seemed bitter about the numbers. In an all-caps Truth Social article on Friday, he threatened to halt trade with partners that run a deficit with the United States unless the Federal Reserve agrees to lower interest rates, a goal he has been pushing for some time. “LOWER THE RATE OR I WILL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT, something that the United States Supreme Court, in its ridiculous and very costly tariff decision, firmly recognized that ‘the President’ has an absolute right to do,” Trump said. “IT’S BETTER THAN TARIFFS! The Federal Reserve Board, with its great new leader, needs to get smart: BE PATRIOTS for a change.”
