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U.S. Trade Deficit Shrinks 24% After Tariffs as Imports Slide in August

A delayed federal report confirms a tariff-driven import slump cutting the August trade gap.

Overview

  • Commerce Department data show August imports fell 5.1% to $340.4 billion while exports edged up 0.1% to $280.8 billion, lowering the overall trade deficit to $59.6 billion.
  • Companies accelerated shipments in July ahead of the tariff restart, then pulled back in August with notable declines in industrial supplies, food and beverages, and machinery, according to Moody’s Analytics.
  • The administration reimposed broad levies on Aug. 7, including 15% on goods from Bolivia, Ecuador and Nigeria, 20% on Taiwanese products and 50% on Brazilian exports.
  • The measures lifted the effective U.S. tariff rate above 18%, the highest since 1934, according to analysis by the Budget Lab at Yale.
  • A Supreme Court challenge is underway, and at a Nov. 5 hearing several justices questioned the president’s authority, while last week the White House removed tariffs on some food items and fertilizers.