The Economic Information Agency reported on the 7th that the U.S. Department of Commerce announced the U.S. goods and services trade deficit widened by 13.7% month-on-month to $105.6 billion in August, higher than the market expectation of $102 billion, and the largest since March 2025. The deficit in July was revised to $92.8 billion.

During the period, imports rose 4.3% month-on-month to $420.75 billion, while exports increased 1.4% to $315.18 billion. Goods imports rose 5.3% to $342.2 billion, mainly driven by demand for industrial supplies and raw materials, as well as capital goods related to artificial intelligence infrastructure; goods exports rose 2.2% to $205.7 billion.

The overall goods deficit widened to $136.6 billion, while the services surplus was about $31 billion. The data showed that despite the U.S. continuously imposing higher tariffs, strong domestic demand continues to drive businesses to increase imports. The trade deficit has dragged down U.S. economic growth for three consecutive quarters, and analysts expect trade factors to potentially reduce economic growth by up to 2.5 percentage points in the third quarter.

In the first eight months of this year, the U.S. goods and services trade deficit narrowed 19.9% year-on-year to approximately $556 billion, with exports up 11.8% and imports up 4.4%. (kk)