U.S. Trade Deficit Widens to $88.6 Billion in July 2026
The U.S. Trade deficit in goods and services expanded sharply to $88.6 billion in July, a $17.4 billion increase from the revised June figure, driven by
The U.S. Trade deficit widened significantly in July 2026, according to a joint report from the Census Bureau and the Bureau of Economic Analysis. The goods and services deficit reached $88.6 billion, a $17.4 billion jump from a revised $71.2 billion in June.
July exports fell to $310.7 billion, down $6.6 billion from the previous month. Imports, however, climbed to $399.3 billion, an increase of $10.8 billion. The data indicates a broad monthly deterioration in the trade balance.
Export and Import Breakdown
Exports of goods dropped by $6.2 billion to $201.0 billion. The decline was led by industrial supplies and materials, which fell $8.7 billion. Within that category, crude oil exports decreased by $4.5 billion and nonmonetary gold exports fell by $3.9 billion. These declines were partially offset by increases in capital goods, up $1.9 billion, and consumer goods, which rose $1.7 billion. Pharmaceutical preparations led the consumer goods increase with a $1.0 billion gain.
Exports of services decreased slightly by $0.4 billion to $109.7 billion. Travel exports fell $0.6 billion, while financial services and transport also declined. Charges for the use of intellectual property rose by $0.4 billion.
On the import side, goods imports surged by $11.4 billion to $320.6 billion. A massive $14.4 billion increase in capital goods imports was the primary driver. Computer imports rose by $6.9 billion, computer accessories by $6.6 billion, and semiconductors by $1.2 billion. Imports of industrial supplies and materials fell by $1.8 billion, with crude oil imports down by the same amount.
Imports of services decreased by $0.6 billion to $78.7 billion, largely due to a $0.5 billion drop in charges for the use of intellectual property.
Country and Area Balances
The monthly goods trade data reveals shifting bilateral balances. The deficit with Mexico grew by $7.2 billion to reach $27.5 billion in July. Switzerland's balance shifted dramatically from a $2.9 billion surplus in June to a $0.6 billion deficit in July. The deficit with Canada, however, narrowed by $3.7 billion to $3.2 billion.
The following table shows selected monthly goods surpluses and deficits on a Census basis for July 2026:
| Country/Area | Balance (Billions of USD) |
|---|---|
| Netherlands | $7.8 Surplus |
| South and Central America | $6.6 Surplus |
| Hong Kong | $3.1 Surplus |
| Mexico | $27.5 Deficit |
| Vietnam | $23.3 Deficit |
| Taiwan | $18.1 Deficit |
| China | $15.2 Deficit |
| South Korea | $10.4 Deficit |
| European Union | $8.9 Deficit |
Quarterly and Year-to-Date Trends
Newly released quarterly data for the second quarter of 2026 shows a surplus with the Netherlands of $29.6 billion and a deficit with Vietnam of $61.2 billion. The surplus with the United Kingdom decreased by $13.3 billion to $9.1 billion in the quarter, while the deficit with Canada grew by $11.9 billion to $13.7 billion.
Despite the sharp monthly increase, the year-to-date picture shows improvement. For the first seven months of 2026, the total goods and services deficit decreased by $188.4 billion, or 29.6 percent, compared to the same period in 2025. Exports increased by 12.0 percent, while imports grew by a more modest 1.9 percent.
The three-month moving average ending in July also showed a widening deficit, increasing by $11.9 billion to $78.5 billion. Average exports over that period fell, while average imports rose. The agencies revised data for January through June 2026, incorporating more comprehensive quarterly and monthly information. June's exports of services were revised upward by $2.3 billion.
The next trade data release, covering August 2026, is scheduled for October 6, 2026. That release will also update the name of the Pacific island nation Nauru to Naoero.
