US August Trade Deficit Widens to $105.6 Billion, Largest in Over a Year

The US trade deficit widened to $105.6 billion in August, the largest since early 2025 and above the roughly $102 billion expected, as AI-driven imports of semiconductors and equipment pushed inbound shipments to a record high. The Commerce Department said Tuesday the goods and services gap grew 13.7% from July's revised $92.8 billion. Imports rose 4.3% to $420.8 billion; exports gained just 1.4% to $315.2 billion. Capital goods imports rose $6.2 billion, including a record $2.4 billion monthly increase in semiconductors, underscoring reliance on overseas suppliers for AI investment. Industrial supplies imports, including crude, rose $9.1 billion. Trade has now subtracted from GDP for three straight quarters, with economists estimating a drag of up to 2.5 percentage points in the third quarter. The Atlanta Fed's GDPNow model projected net exports would cut 2.59 points from third-quarter growth. Despite tariffs, imports keep climbing. The goods deficit with Canada hit its highest since early 2025 after talks collapsed and the US imposed 50% duties on August 22.