The U.S. trade deficit jumped to its widest level in 17 months in August, a setback for President Donald Trump's push to use tariffs to close it.
The deficit, which measures how much more the United States buys from abroad than it sells, climbed 13.7 percent from July to $105.6 billion – the biggest monthly gap since before Trump rolled out sweeping global tariffs in April 2025, reported the New York Times.
Imports drove the increase, rising 4.3 percent to an all-time high of $420.8 billion, according to data released by the Commerce Department. Exports also grew, but at a much slower pace, gaining 1.4 percent to reach $315.2 billion. Because imports outpaced exports, the gap widened even as American companies sold more goods overseas.
The surge in foreign purchases was led by petroleum, gold and the advanced computer chips that power artificial intelligence.
Trump has long pointed to the trade deficit as proof that American manufacturing has been hollowed out. To bring it down, his administration has slapped steep tariffs on a wide range of goods, from steel and auto parts to toys and drones.
But the gap has been climbing in recent months, fueled in part by the AI building boom. Tech companies racing to build data centers are bringing in huge volumes of costly chips, most of which are manufactured in Asia.
Many economists have doubted from the start that tariffs could fix the problem, arguing that the trade balance is shaped largely by broader forces, such as the pace of economic growth and the size of the federal debt, rather than by import taxes.
The deficit has swung wildly throughout Trump's second term. After his election, companies rushed to stockpile goods ahead of expected tariffs, sending the gap to record levels in the early months of his presidency. It then fell after the "Liberation Day" tariffs took effect.
In February, the Supreme Court struck down most of those levies, and the administration turned to other legal authorities to partially restore them. In July, it imposed new tariffs on more than 80 countries, yet the deficit kept growing the following month, and it is now larger than at any point since the global tariffs were announced.
The administration is now preparing yet another round of tariffs that could affect more than 40 countries.
