U.S. Trade Deficit Widens to $88.6 Billion in July as Imports Rise

The July figure represented an increase of $17.4 billion from the revised $71.2 billion deficit recorded in June. The latest report provides a snapshot of U.S. international trade activity during the summer and highlights changes in the movement of goods and services between the United States and its global trading partners.

According to the federal data, U.S. exports totaled $310.7 billion in July, down $6.6 billion from June. Imports, meanwhile, reached $399.3 billion, increasing by $10.8 billion. The combination resulted in a substantially larger monthly trade deficit.

Goods Trade Accounts for Most of the Increase

The widening deficit was driven primarily by trade in goods.

The U.S. goods deficit increased by $17.6 billion in July, reaching $119.6 billion. At the same time, the country recorded a $31.0 billion surplus in services, an increase of $0.2 billion from June.

Goods exports declined by $6.2 billion to $201.0 billion. Several categories contributed to the decrease. Exports of industrial supplies and materials fell by $8.7 billion, while crude oil exports declined by $4.5 billion. Nonmonetary gold exports also decreased by $3.9 billion.

Some categories recorded gains despite the overall decline. Capital goods exports increased by $1.9 billion, while exports of consumer goods rose by $1.7 billion.

Services exports also decreased slightly during the month, falling by $0.4 billion to $109.7 billion.

On the import side, goods imports increased by $11.4 billion to $320.6 billion. Capital goods represented a significant portion of the increase, rising by $14.4 billion.

Computer imports increased by $6.9 billion, while computer accessories rose by $6.6 billion. Semiconductor imports also increased, gaining $1.2 billion during the month.

Changes Among Major Trading Partners

The July data also showed changes in the United States' goods trade balances with individual trading partners.

The United States recorded goods surpluses with several countries and regions, including the Netherlands, South and Central America, Hong Kong, the United Kingdom, Brazil, Singapore and Saudi Arabia.

The largest goods deficits were recorded with Mexico, Vietnam, Taiwan and China.

The U.S. goods deficit with Mexico increased by $7.2 billion in July, reaching $27.5 billion. Exports to Mexico decreased slightly to $32.6 billion, while imports from Mexico increased by $7.0 billion to $60.1 billion.

The goods deficit with Vietnam stood at $23.3 billion, while the deficit with Taiwan reached $18.1 billion. The U.S. goods deficit with China was $15.2 billion.

These figures represent monthly trade flows and can change considerably from one reporting period to another as businesses adjust shipments, inventories and purchasing patterns.

Year-to-Date Deficit Remains Lower

Although the July deficit increased sharply from June, the broader year-to-date picture remained different.

For the first seven months of 2026, the U.S. goods and services deficit decreased by $188.4 billion, or 29.6%, compared with the same period in 2025.

During those seven months, exports increased by $237.2 billion, representing a 12.0% increase. Imports rose by $48.8 billion, or 1.9%, over the same period.

The difference between the monthly and year-to-date figures is important when assessing the latest report. July's larger deficit reflects conditions during a single month, while the year-to-date numbers provide a broader view of trade activity throughout 2026.

The three-month moving average also increased. For the three months ending in July, the average monthly goods and services deficit rose by $11.9 billion to $78.5 billion. Average exports declined by $6.4 billion, while average imports increased by $5.5 billion.

Why the Data Matters

The trade balance is an important measure of economic activity because it tracks the difference between the value of goods and services exported by the United States and the value imported from other countries.

The July figures show continued substantial international trade activity, particularly involving technology-related and capital goods. The increase in imports of computers, computer accessories and semiconductors was among the notable developments within the monthly goods data.

For businesses and readers following the U.S. economy, the main takeaway is that the monthly trade deficit expanded considerably in July compared with June. However, the cumulative deficit for the first seven months of 2026 remained well below the level recorded during the same period last year.

The trade report therefore presents a mixed monthly picture: imports increased while exports declined in July, but the broader year-to-date trade deficit continued to show a substantial improvement compared with 2025.

The next U.S. international trade report, covering August 2026, is scheduled for release in October.