America’s Trade Deficit Plunges as Trump Tariffs Take Hold in Earnest

America’s trade deficit plunged nearly 24 percent in August, according to delayed government statistics released Wednesday — one of the clearest signals yet that President Trump’s tariff policies are discouraging imports into America.The goods and services deficit was $59.6 billion in August, down $18.6 billion from $78.2 billion in July, according to the Bureau of Economic Analysis. The report was delivered nearly two months late because of the partial government shutdown.“August’s smaller trade deficit will be a tailwind for third quarter real GDP, since it means that more U.S. expenditures were directed toward domestically-produced goods and services rather than foreign ones,” a chief economist at Comerica Bank, Bill Adams, wrote in a commentary. “While this release is quite dated because of the government shutdown, it contributes to evidence that the economy was growing briskly in the third quarter.”Part of the drop can be attributed to a surge of imports in July to beat tariffs that went into effect on almost every country on August 7.Imports of consumer goods, most notably in jewelry and pharmaceutical imports, decreased $3.7 billion. Capital goods imports were down $3.4 billion, with large drops in computer accessories and telecommunications equipment but computer imports increased in August.August exports ticked up $0.2 billion over July to $280.8 billion.The report showed America still has a trade deficit with several key countries, including Mexico, China, Japan, and members of the European Union.The bureau says it does not have its next release schedule as it tries to recover from the government shutdown.Mr. Trump’s tariff policy is in the hands of the Supreme Court. The administration is seeking to get justices to overturn decisions by two lower courts that Mr. Trump’s use of the International Emergency Economic Powers Act as the basis of his “Liberation Day” tariffs was an overstep.A group of small businesses and Democrat-led states sued saying the import duties are a use of the law that lawmakers never intended and one that has never been claimed by the president.Several conservative Supreme Court justices seemed skeptical of the Trump administration’s rationale for levying his “Liberation Day” tariffs during an hours-long, high-stakes hearing earlier this month.The justices could wait until June to release their decision on the case but it could come much earlier due to the enormous impact of the case. Mr. Trump asked the justices to consider the case on an “expedited” timeline.

America’s Trade Deficit Plunges as Trump Tariffs Take Hold in Earnest

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