A vehicle carrying Toyota pickup trucks drives into a California Highway Patrol inspection station after entering the U.S. from Mexico, in Otay Mesa, Calif., in 2025PATRICK T. FALLON/AFP/Getty Images
The U.S. trade deficit narrowed in June, but the trend is unlikely to be sustained amid an artificial intelligence build-out that is heavily reliant on imports.
Both imports and exports declined in June, the report from the Commerce Department showed on Tuesday. The government last week estimated that the trade gap subtracted a full percentage point from gross domestic product growth in the second quarter.
“June’s report showed a welcome narrowing in the trade gap,” said Priscilla Thiagamoorthy, a senior economist at BMO Capital Markets. “We still see net exports subtracting from GDP growth in the couple of quarters ahead.”
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The trade shortfall contracted 5.6 per cent to US$73.3-billion, the Commerce Department’s Bureau of Economic Analysis and Census Bureau said. Economists polled by Reuters had forecast the deficit at $73.0 billion.
Exports slipped 0.9 per cent to US$314.7-billion. Goods exports declined 1.9 per cent to US$206.9-billion. They were weighed down by a US$3.3-billion decline in exports of industrial supplies and materials, which include petroleum. Crude oil exports fell US$5.7-billion, reflecting a decline in the average price. Crude oil export prices averaged US$95.82 a barrel compared to US$107.82 in May.
Exports of fuel oil fell US$1.6-billion, while those of non-monetary gold increased $3.4 billion. Capital goods slipped US$0.6-billion amid a US$1.1-billion drop in shipments of computers. Imports dropped 1.8 per cent to US$388-billion in June. Goods imports fell 2.5 per cent to US$309-billion.
The decline was led by a US$2.1-billion decline in capital goods imports, which reflected a US$3-billion drop in computers. Still, imports of computers are US$95.4-billion higher so far this year compared to the same period in 2025. There is strong demand for technology goods as businesses invest heavily in AI. Imports of telecommunications equipment increased US$1.1-billion in June.
Robust domestic demand
Consumer goods imports fell US$2.1-billion, pulled down by a US$1.9-billion drop in pharmaceutical preparations. Inflation-adjusted imports of petroleum were the lowest since April, 2020.
The so-called real goods trade deficit narrowed 5.3 per cent to US$94.5-billion in June. Exports of services increased US$1.1-billion to US$107.8-billion in June, lifted by financial and trade services. Imports of services increased US$0.6-billion to US$79.0-billion, amid a rise in charges for the use of intellectual property as well as gains in transport and insurance services. Imports of travel services, however, fell.
The economy grew at a 1.5-per-cent annualized rate last quarter, though domestic demand, driven by consumers and businesses ramping up spending on AI infrastructure, increased at its fastest pace since the first quarter of 2023.
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The nation maintained goods trade deficits with many countries, including Canada, Germany, India, Malaysia, Japan, Ireland, Italy, France and Israel. It had record goods trade deficits with Mexico, Vietnam and South Korea in June. The goods trade deficit with China widened to US$15.3-billion from US$14.5-billion in May. The deficits have persisted despite President Donald Trump’s aggressive import tariffs.
“For the record, the trade deficit that President Trump vowed to extinguish was $79.8 billion in November 2024 when he was elected for another term, and is still $73.3 billion in today’s figures for June 2026,” said Christopher Rupkey, chief economist at FWDBONDS.