US Trade Deficit Narrows Amid Tariff Uncertainty

The U.S. trade deficit narrowed to $60.2 billion in June 2025, its smallest since September 2023 and better than economists expected. The contraction was mainly due to a 3.7% drop in imports, particularly in consumer goods, passenger cars, crude oil, and pharmaceuticals, while exports declined by 0.5%. Businesses accelerated purchases before the implementation of President Trump's tariffs, which have pushed the average U.S. tariff rate to its highest since 1934. The reduced trade gap contributed to a 3.0% annualized rebound in second-quarter GDP after a previous contraction. However, underlying economic activity remains weak, and concerns persist about the broader effects of escalating tariffs on global trade. The impact of the new tariffs, which take effect August 7, will become clearer in the third quarter.