GeopoliticsMarket noteWednesday 7 October 2026, 07:08
US trade deficit widens to $105.6bn, the largest since March 2025
The US trade deficit jumped to $105.6bn in August, the widest since March 2025, as imports of crude oil, gold and chips rose much faster than exports.
By The Notebook Desk
The US trade deficit widened sharply in August. The gap between what the country buys from abroad and what it sells rose to $105.6bn, from a revised $92.8bn in July, the Census Bureau and the Bureau of Economic Analysis said on Tuesday. It is the largest monthly US trade deficit since March 2025.
Imports did most of the work. They rose by $17.2bn to $420.8bn, while exports rose by $4.5bn to $315.2bn. The goods deficit alone grew by $12.8bn to $136.6bn. The surplus on services was almost unchanged at $31.0bn.
What pushed US imports up
Three groups explain much of the rise in goods imports. Industrial supplies and materials rose by $9.1bn, and within them crude oil by $3.3bn and non-monetary gold by $3.1bn. Capital goods rose by $6.2bn, with semiconductors up $2.4bn and other industrial machinery up $1.3bn.
Oil is the easiest part to explain. Crude prices have climbed with the war in the Gulf: Brent stood at $113.96 a barrel on 29 September, the latest Energy Information Administration figure. The same barrels cost more, so the import bill rises even when the volume does not.
Prices are not the whole story, though. Adjusted for prices, in 2017 dollars, the goods deficit rose by 8.2% to $114.7bn, against an 11.1% rise in current dollars. Real imports of goods rose by 4.1%. The US bought more goods, not only dearer ones.
Exports also had help from energy. Crude oil exports rose by $2.0bn and fuel oil by $1.2bn, and gold exports by $2.3bn. Exports of consumer goods fell by $2.2bn, led by a $2.4bn drop in pharmaceutical preparations.
Services barely moved. Exports of services were $109.5bn and imports $78.5bn, each up by less than $0.1bn. July’s figures were also revised: imports of goods were revised up by $4.4bn, which made July’s deficit wider than first reported.
How unusual is a $105.6bn deficit?
It is large by the standards of this year, but not a record. From January to April 2026 the monthly deficit stayed between about $52bn and $54bn, BEA’s series on FRED shows. It then widened to $75.8bn in May and $92.8bn in July before August’s jump.
The last bigger month was March 2025, when the deficit reached $133.0bn. That early-2025 surge is why the year-to-date figure still looks good. From January to August the deficit was $138.2bn, or 19.9%, smaller than in the same months of 2025. Exports were up 11.8% on the year and imports up 4.4%.
The three-month average shows the turn more clearly. It rose by $9.9bn to $89.9bn in the three months to August, and was $25.4bn higher than a year earlier.
Who the US trades with
By country, on a goods basis, the largest deficits in August were with Mexico ($27.7bn), Vietnam ($24.0bn), Taiwan ($18.3bn) and China ($16.4bn). The deficit with the European Union was $11.0bn. The deficit with Canada widened by $4.1bn to $7.1bn, as imports from Canada rose by $4.6bn.
The largest surpluses were with the Netherlands ($7.7bn), South and Central America ($5.6bn) and the United Kingdom ($3.6bn).
Why the trade deficit matters now
A wider deficit subtracts from growth in the national accounts, because imports are taken away from what Americans spend. A jump this late in the quarter will weigh on the first estimate of third-quarter GDP, though BEA treats gold differently there: it replaces gold exports and imports with an adjustment, so the gold swing will not count in GDP.
The figures also cut against the year’s earlier trend. For most of 2026 the deficit ran well below 2025’s levels; from May to August it widened in three months out of four, and August’s gap was twice January’s.
The next trade report, for September, is due on 4 November.
Disclosure
This is analysis and opinion, not investment advice.