President Trump’s tariffs are creating noticeable effects in the economy, particularly in the goods trade deficit. In June, the deficit fell by 10.8% to $86 billion, while economists expected it to rise to $98.2 billion. May’s deficit was $96.4 billion.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Imports fell by $11.5 billion month-over-month to $264.2 billion, a decline of 4.2%. Exports fell by less than 1%, slipping by $1.1 billion to $178.2 billion.
How the Trade Deficit Affects GDP
GDP is forecast to fall by 0.5% in the first quarter, impacted by businesses front-loading imports ahead of tariffs. That has a negative effect on GDP. The deficit accelerated to $162 billion in March because of high imports, but has since declined.
That phenomenon is expected to weaken in the second quarter, with Reuters economists forecasting 2.4% growth. A lower trade deficit has a positive effect on GDP.
The Dow Jones (DJIA) is down by 0.10% at the time of writing.
