The US trade deficit shrank sharply in June to $60.2 billion, marking a 16% decline from the revised $71.7 billion recorded in May, according to data released Tuesday by the Department of Commerce. The unexpected contraction in the world’s largest economy’s trade gap was driven primarily by a steep drop in imports, as President Donald Trump’s wide-ranging tariffs began to bite, AFP reported.Imports fell 3.7% month-on-month to $337.5 billion, with consumer goods leading the retreat, down by $8.4 billion. Industrial supplies and materials also fell by $2.7 billion, while auto and parts imports declined by $1.3 billion. Exports also saw a marginal 0.5% decline to $277.3 billion, with outbound shipments of industrial supplies down by $1.3 billion.Analysts attributed the shrinkage to reduced foreign purchases amid rising costs, as Trump’s administration enforced a 10% duty on most trading partners in April. The US has also imposed higher tariffs on steel, aluminium, and automobiles, fuelling cost pressures on businesses.The data also showed the goods trade deficit with China narrowed by $4.6 billion to $9.4 billion in June. This came against the backdrop of escalating tit-for-tat tariffs between Washington and Beijing since April, which briefly reached triple-digit levels before both sides agreed in May to lower duties temporarily until August 12.
