The U.S. trade deficit in goods and services narrowed by more than 10 percent from August to September as the Trump administration's tariffs continued to weigh on trade, Commerce Department data showed Thursday.
Imports rose just 0.6 percent from August to $342.1 billion, while exports rose 3 percent for the month to $289.3 billion. With exports growing faster than imports, the U.S. trade deficit shrank in line with the Trump administration's goals.
At $52.8 billion, the goods and services trade deficit in September reached its lowest level since June 2020, when the United States was in the midst of the Covid-19 pandemic.
Trade experts have cautioned against drawing too many conclusions from just a few months of data, saying trade patterns have recently been distorted by companies' efforts to avoid paying tariffs.
Economists have also questioned the president's overall focus on the trade deficit. Although President Trump has long viewed the trade deficit as a sign of economic weakness, many economists have criticized his views on the measure as simplistic or incorrect.
The sweeping tariffs that Mr. Trump imposed this year on imports from countries around the world, including on cars, metals and furniture, have caused major trade swings. Before the tariffs went into effect, many American companies imported a flood of products to avoid paying import duties.
After Mr. Trump's global tariffs took effect on August 7, imports fell sharply before recovering somewhat in September. On August 29, the Trump administration also ended the “de minimis” exemption that allowed foreign shipments valued at less than $800 to enter the United States duty-free. Opponents criticized the regulation as a loophole that disadvantages US manufacturers in favor of foreign competitors.
Since the tariffs went into effect, corporate inventory levels have allowed some companies to delay importing products. Aggressive buying earlier this year has also caused the US trade deficit to widen significantly so far in 2025. For the year ending in September, the trade deficit in goods and services increased by more than 17 percent compared to the same period in 2024, data compiled by the Census Bureau show. Exports rose 5.2 percent during this period, while imports increased 7.7 percent.
It remains to be seen how much U.S. consumers and businesses will import in the coming months given the now higher prices for foreign goods. According to the Budget Lab at Yale, the effective U.S. tariff rate rose to more than 16 percent in November, the highest level since 1935, making it significantly more expensive for importers to bring goods into the country.
Brad Setser, a trade expert at the Council on Foreign Relations, said the data showed “clear weakness” in U.S. imports in September. “The question is how you want to interpret that,” he added. “Is this a payback right out of the gate? Or are the tariffs starting to have an impact?”
Mr. Setser said it was too early to answer that question, but global trade data suggests U.S. imports could rise again in the next few months, driven in part by purchases of foreign computers and chips to build data centers.
The fact that there could be significant tariff changes in the coming weeks creates additional uncertainty. The Supreme Court will soon rule on the legality of many of the tariffs that Mr. Trump imposed under a 1970s emergency law. Administration officials said that if those tariffs were eliminated, they would direct other agencies to collect duties.
Mr. Trump and his advisers continue to tout the economic benefits of tariffs. At an event in Washington on Wednesday, Jamieson Greer, the U.S. Trade Representative, said that workers' wages are rising and that the U.S. trade deficit is “clearly heading in the direction that we want and that we expect.”
However, other economic data appears to provide little evidence, at least so far, that tariffs are helping U.S. manufacturing. While companies have promised the White House eye-popping sums of investment, spending on building American factories has continued to fall and the country has shed manufacturing jobs in recent months.
Other trade trends also reflect the impact of the government's trade war. U.S. soy exports fell sharply after China responded to Mr. Trump's tariffs by imposing its own levies on American agriculture. In the year ended September, U.S. soybean exports fell to $16.8 billion from $19.2 billion in the same period last year.
U.S. automobile imports and exports have also been weak this year due to U.S. tariffs on foreign cars and strong international competition from inexpensive Chinese-made vehicles. But U.S. exports of natural gas, corn, computers and airplanes have increased.
Some of the monthly changes in trade were driven by companies stockpiling pharmaceuticals and investors buying and selling gold, partly to offset uncertainty surrounding tariffs.
Changes in gold trade helped the United States run a $6.6 billion trade surplus with Switzerland in September, up from a slight deficit the previous month. The U.S. trade deficit with Ireland, a major pharmaceutical producer, also boomed in September, rising $15.3 billion to $18.2 billion.
At the same time, US trade with China has slowed. In September, the trade deficit with China narrowed by $4 billion to $11.4 billion. Year to date, the U.S. trade deficit with China totaled $160.5 billion, compared with trade deficits of $183 billion for the European Union, $146 billion for Mexico and $38 billion for Canada.
Because of tariffs and trade tensions, the overall share of U.S. imports from China has fallen to levels seen when China joined the World Trade Organization in 2001.
But while China's exports to the U.S. have declined, China's overall exports to the rest of the world have continued to rise as factories churn out cheap cars, electronics and other products. China's trade surplus with the world, the volume of what it exports minus what it imports, has already risen to over $1 trillion this year, hitting a new record.
This trend has raised fears that Chinese exports are driving industries in other countries out of business and that Chinese products are merely being transported to the United States legally or illegally through other countries, including Vietnam and Mexico. On Thursday, Mexico's Congress approved tariffs of up to 50 percent on Chinese products to block cheap Chinese goods and align Mexican policies with those of the United States.
Mr. Setser of the Council on Foreign Relations said declining U.S. imports from China had generally been offset by rising imports from elsewhere in Asia. If the United States was reshaping its trade relationships anywhere, it would be with close allies like Canada and the European Union, which exported less to the United States because of the tariffs, he argued.
“I see more evidence of sustainable possible adjustment with Canada and Europe than with Asia as a whole,” he said.