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Trump Threatens to Halt Trade Following News That US Trade Deficit Grew in July
wwd.com • • business
Key Points:
- The U.S. trade deficit widened to $88.6 billion in July, the highest in over a year, driven by a $10.8 billion rise in imports, particularly technology goods, and a $6.6 billion drop in exports, including crude oil and gold.
- Despite the monthly increase, the year-to-date trade deficit has fallen by 29.6% compared to 2025, with exports growing 12% and imports rising 1.9%, which the White House credits to President Trump's trade policies.
- Persistent large deficits remain with key trading partners such as China, Vietnam, Taiwan, South Korea, the EU, and Mexico, despite tariffs intended to reduce imbalances; the deficit with Canada decreased but may be affected by upcoming Canadian tariffs.
- President Trump reacted angrily to the July figures, threatening to halt trade with deficit countries unless the Federal Reserve lowers interest rates, citing his authority to impose tariffs affirmed by a recent Supreme Court decision.
- Historical data suggest the administration's trade strategy has not significantly reduced the deficit, as the July 2026 deficit surpasses the average monthly deficit before Trump's election and is the largest since tariffs began in April 2025.
