US trade deficit jumps 24.4% to $88.6 billion in July on AI import surge
US trade deficit hit $88.6 billion in July, up 24.4%, as AI-driven imports surged and exports fell.
The United States trade deficit widened sharply in July, reaching its highest level since March 2025. Government data released on Thursday showed the gap grew 24.4 percent to $88.6 billion, pressured by a decline in exports and rising import costs.
Total exports slipped 2.1 percent to $310.7 billion, weighed down by lower shipments of crude oil and gold. Imports, however, climbed 2.8 percent to $399.3 billion, driven by strong demand for computers, accessories, and semiconductors — key inputs for the domestic build-out of artificial intelligence infrastructure.
The reliance on foreign technology pushed trade deficits with several nations to record levels. The gap with Taiwan, a major semiconductor manufacturing hub, hit an all-time high of $20.7 billion for the month. Records were also set with Mexico, Vietnam, Thailand, South Korea, and Malaysia. In contrast, the deficit with Canada narrowed despite an ongoing trade dispute involving U.S. tariffs on Canadian goods.
The figures reflect the administration's push to reduce trade gaps through tariffs. After the Supreme Court struck down earlier global tariffs in February, officials imposed fresh duties on 60 trading partners in July. Commerce Secretary Howard Lutnick has signalled further measures, telling CNBC that new targeted tariffs on semiconductors are being developed. "What you're going to see is targeted, thoughtful tariff policy that basically says if you build here, you don't pay," he said.
Geopolitical instability is also straining trade flows. The conflict in the Middle East has disrupted supply lines, with Iran largely blocking the Strait of Hormuz, a critical route for global energy and fertilizer shipments.