The U.S. trade deficit widened to $88.6 billion in July, its highest level in more than a year and the largest since nearly $133 billion in March 2025, as imports of computers, accessories and semiconductors surged while exports of crude oil and gold declined. The shortfall rose $17.4 billion, or 24.4%, from $71.2 billion in June and came in below economists' $90 billion forecast. Imports increased 2.8% to $399.3 billion, with goods imports up 3.7% to $320.6 billion and capital goods imports jumping $14.4 billion to a record $140.3 billion—the highest share of goods imports on record—amid AI-related demand. Exports fell 2.1% to $310.7 billion as goods shipments dropped 3.0% to $201.0 billion. The goods trade deficit widened 17.3% to $119.6 billion. The July gap was larger than the average monthly deficit in the year before President Trump was elected and the largest since he began imposing tariffs in earnest in April of the previous year. Economists said the data largely reflected U.S. economic strength and spending on AI infrastructure, while the war with Iran, new tariff measures and court challenges to some levies have added to supply-chain uncertainty. Trade subtracted 1.14 percentage points from second-quarter GDP growth when the economy expanded at a 1.5% annualized rate and is positioned to drag again in the third quarter. The United States ran large deficits with Mexico, Vietnam, Taiwan, China, South Korea and the European Union, posting record goods shortfalls with several partners, while the Canadian deficit narrowed to $3.2 billion amid an ongoing trade war. President Trump has cited the trade gap to justify tariffs, while White House senior deputy press secretary Kush Desai said year-to-date data showed the deficit down $188.4 billion, or 29.6%, from the same period in 2025.