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Wall Street JournalTrump's Tariffs Rewrite Trade Math — Deficit Hits 5-Year Low
For months, President Donald Trump has insisted that America's huge trade deficit could be tamed with one blunt tool: tariffs.
In September, the numbers finally moved his way.
New figures from the Census Bureau on Thursday show the U.S. trade deficit narrowed to $52.8 billion in September, the smallest gap since June 2020.
That's a sharp improvement from August's revised $59.3 billion and well below expectations for a $63.3 billion deficit.
Exports Surged, Imports Grew Too, But More Slowly
U.S. exports jumped 3% to $289.3 billion, the second-highest monthly figure on record.
Key contributors included industrial supplies and materials, up $7.2 billion, and nonmonetary gold, up $6.1 billion, as well as increases in consumer goods, up $4.1 billion, and pharmaceutical products, up $3.1 billion.
But the gains weren't universal. Computer exports dropped $2.3 billion, and U.S. service exports slipped $0.4 billion. Travel services fell $0.6 billion, and transport declined $0.2 billion, tempering what was otherwise a broad uptick.
Imports edged up 0.6% to $342.1 billion, a modest $1.9 billion increase, far slower than the pace seen earlier this year. Pharmaceutical imports accounted for the largest jump, surging $12.9 billion. Nonmonetary gold added another $1.9 billion, and computer accessories rose $1.7 billion.
Offsetting those gains were notable declines in key categories: computers fell $4.7 billion, crude oil slipped $1.3 billion, and electric apparatus dropped $1.5 billion.
Service imports ticked up just $0.3 billion, led by transport and financial services.
Despite the September improvement, the year-to-date goods and services deficit rose $112.6 billion, or 17.2%, from the same period in 2024. Imports are up 7.7% year-over-year, while exports have increased by a slower 5.2%.
A three-month average shows the deficit narrowing to $63.1 billion in the third quarter, compared with $77.1 billion in the same period in 2024, as exports rose by $10.4 billion and imports fell by $3.6 billion.
Trade Deficit With China Shrinks Ahead Of Key Supreme Court Ruling
The U.S. logged its biggest September deficits with Ireland ($18.2B), Mexico ($17.8B) and the European Union ($17.8B).
The deficit with China narrowed by $4 billion to $11.4 billion, thanks to a combination of slightly higher U.S. exports, up $0.2 billion to $8.8 billion, and sharply lower imports, which fell $3.9 billion to $20.1 billion.
September's tightening gap arrives at a delicate moment for the Trump administration, which has championed tariffs and stricter trade measures as a way to finally reshape economic relationships with key trading partners like China.
Yet, the Supreme Court is now called upon to rule on the legality of roughly half of Trump's tariff package, a decision with significant implications for U.S. trade strategy.
For now, prediction markets aren't convinced the tariffs will survive intact. Polymarket assigns just a 25% chance that the Court will uphold Trump's measures, setting up a potentially dramatic collision between the White House's trade ambitions and the judicial scrutiny ahead.
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