WASHINGTON — After 20 months in office and with the midterm elections approaching, President Donald Trump is at pains to demonstrate his administration’s economic wins. But one metric he has identified as an important measuring stick for his policies has been moving steadily in the wrong direction.

The U.S. trade deficit — a measure of the difference between what the country imports and what it exports — rose sharply in August to hit a 17-month high, after also rising significantly in July, data from the Commerce Department showed Tuesday.

Trade Deficit Eclipses $105 Billion in August

The trade deficit grew to $105.6 billion in August, a 13.7% increase from July, driven by an increase in imports of petroleum, gold, and chips used for artificial intelligence. It was the largest monthly total since before Trump imposed his global tariffs in April 2025, and larger than any monthly trade deficit in the last year of the Biden administration.

The widening trade deficit stemmed from rising imports, which outpaced the growth in exports. U.S. imports hit a record $420.8 billion in August, climbing 4.3% from July. Exports grew 1.4% compared with July, hitting $315.2 billion.

The trade deficit has tended to increase over time as the U.S. economy grows. But the Trump administration has viewed the metric as a sign of weakness in America’s manufacturing sector. Officials have tried to reduce the trade deficit by imposing hefty tariffs on imports.

AI Boom Relies on Importing Computer Chips

The lack of success in lowering the trade deficit is partly a result of the AI boom. To construct new data centers, companies are importing far more computer chips, most of which are made in Asia.

There’s also a bigger economic question about how much tariffs by themselves can reduce the trade deficit, particularly at a time when the U.S. economy is expanding, government deficits are growing and consumers are continuing to spend on foreign goods.

Trump officials have blamed the disruptions to their tariff plan for the increase in the trade deficit. The Supreme Court struck down many of Trump’s tariffs in February, saying he had misused an emergency law to impose them.

Since then, the administration has put a lower tariff of 10% to 12.5% in effect on many products. Officials could issue new levies in the coming weeks and months.

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This article originally appeared in The New York Times.
By Ana Swanson/Maddie McGarvey
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