(The Center Square) – The U.S. trade deficit narrowed in June as President Donald Trump’s tariffs deterred businesses from importing goods, the Department of Commerce said Tuesday.
Imports dropped around 4% from May after businesses hurried to front-load imports earlier this year before sweeping tariffs took effect. Exports also fell, but at a more modest rate of 0.5%, as the U.S. sold fewer industrial goods.
The Commerce Department also said the overall trade gap narrowed 16% to $60.2 billion in June, the lowest the deficit has been since Sept. 2023.
Tariffs targeting dozens of U.S. trade partners were solidified Friday after heads of state scrambled to work out trade deals with the U.S. in recent weeks to avoid high levies. The steepest of these levies include a 50% tariff on Brazil and a 35% tariff on Canada.
The White House also imposed tariffs on several industries, including steel, aluminum and automobiles, with the hope that businesses would be incentivized to manufacture goods in the U.S. rather than outsourcing production to other countries.
The U.S. is still negotiating a trade deal with China ahead of the Aug. 12 deadline. After concluding two days of meetings with Chinese representatives in Stockholm last week, Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer said they are feeling “optimistic,” but signaled that negotiations are still ongoing.
“We’re getting very close to a deal,” Trump told CNBC Tuesday. “We’re getting along with China very well.”
The Commerce Department reported Tuesday that the U.S. trade deficit with China fell to $9.5 billion in June, marking its narrowest in 20 years. The trade deficit with China has declined for five consecutive months, narrowing by 70% to $22.2 billion. Imports from China also fell to $18.9 billion, the lowest it’s been since 2009.
The current 30% tariff on most Chinese goods has discouraged U.S. businesses from importing from China. If a trade deal is not reached before Aug. 12, China’s tariff rate will return to more than 100%.
