US Trade Gap Shrinks to Near Two-Year Low as China Deficit Plunges

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US Trade Gap Shrinks to Near Two-Year Low as China Deficit Plunges
August 5th, 2025

The United States recorded its smallest trade deficit in nearly two years during June when it reached $60.2 billion because consumer goods imports decreased and China trade deficit reached its lowest point in 21 years. The Commerce Department reported that imports decreased to $337.5 billion from $350.3 billion in May and exports decreased to $277.3 billion.

The second-quarter GDP growth experienced a 3% annualized rate increase because of steep tariff measures that improved the economy. The current economic indicators show that fundamental market demand is actually decreasing.

The trade deficit between the United States and China decreased by about one-third to $9.5 billion which represents the lowest level since February 2004 and a 70% reduction during the past five months. The imports from China reached $18.9 billion which stands as the lowest level since 2009 because of the 30% tariff imposed on most Chinese goods.

The average U.S. tariff rate reached its highest level since 1934 at 18.3% according to Yale's Budget Lab because of the upcoming 10% to 41% tariffs scheduled for August 7. U.S. and Chinese negotiators met in Sweden to discuss extending the August 12 deadline because officials wanted to prevent tariff rates from exceeding 100%. Supply chains face the possibility of renewed disruptions when no agreement is reached.

Dominic Maley

Dominic Maley is an American journalist recognized for his sharp and insightful reporting on social and political issues. His work is known for its depth, integrity, and the ability to highlight critical societal concerns.

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