The US trade deficit widened to $105.6 billion in August, its highest level since March 2025, as imports rose faster than exports, according to data published Tuesday by the Department of Commerce.

The August deficit in goods and services compared with $92.8 billion in July, a figure that was revised upward. The result was also higher than the $102 billion deficit economists had expected, according to MarketWatch’s consensus.

Despite the August increase, the US trade deficit remains nearly 20% lower than at the start of the year. The decline, however, has slowed from almost 30% a month earlier as imports have accelerated.

Imports Rise on Energy and Semiconductor Demand

Goods exports increased 1.4% in August, supported by demand for energy products, non-monetary gold and digital products. Exports of civil aviation and pharmaceutical products declined during the month.

Imports of goods increased 4.3%, driven by continued demand for energy, non-monetary gold and semiconductors. Higher oil prices also pushed up energy costs, while semiconductor demand continued to benefit from increased investment in data centres for artificial intelligence.

Services exports and imports were largely unchanged from the previous month.

Donald Trump on 2 April 2025 during “Liberation Day”, when new import tariffs were introduced

Donald Trump on 2 April 2025 during “Liberation Day”, when new import tariffs were introduced – Shutterstock

Among the US’s trading partners, Mexico, Vietnam and Taiwan remained the three countries with which the US recorded its largest goods trade deficits. The deficit with China increased to $16.4 billion.

The US goods deficit with the European Union narrowed to $11 billion, although the shortfall remained concentrated in Germany, France, Ireland and Italy. The US continued to record a trade surplus with the Benelux countries, particularly the Netherlands, as well as with the United Kingdom outside the EU.

Why It Matters

The latest figures show how rising imports are putting upward pressure on the US trade deficit even as exports continue to grow. Energy costs and strong demand for semiconductors, linked to investment in artificial intelligence data centres, were among the factors contributing to the August increase.