The U.S. trade deficit dropped sharply in October, reaching its lowest level since 2009 as imports dropped under President Trump’s sweeping tariffs, according to new government data.
The overall trade gap plunged 39% to $29.4 billion in October, as imports fell by 3.2%, Department of Commerce figures show. The deficit was significantly lower than the $58.4 billion median forecast from surveys of economists by Dow Jones Newswires and The Wall Street Journal.
While U.S. exports rose by $7.8 billion in October to $302 billion, imports dropped by $11 billion to $331.4 billion. The U.S. trade deficit in September was $48.1 billion.
“Swings in trade of gold and pharmaceuticals were behind the plunge in the trade deficit to a two-decade low in October, though higher computer imports suggest there are genuine signs of strength elsewhere in the economy amid the AI buildout,” Bradley Saunders, North America economist with Capital Economics, said in a report.
The release of the trade data was delayed by more than a month due to a 43-day government shutdown last year, depriving officials and companies of updated figures as they assess the health of the world’s biggest economy.
The figures underscore how Mr. Trump’s volatile and sweeping tariff policies have influenced trade flows. When the president unveiled wide-ranging tariffs on imports from dozens of trading partners, U.S. businesses rushed to stock up on inventory, front-loading imports ahead of planned tariff hikes.
This has allowed many firms to avoid passing on the full cost of tariffs to consumers, keeping price hikes on goods relatively tame.
As U.S. households grapple with an affordability crisis, Mr. Trump has more recently expanded the range of goods exempt from tariffs, including key agricultural imports.
As of mid-November, the Budget Lab at Yale University estimated that consumers face an overall average effective tariff rate topping 16%, the highest since the 1930s.
Mr. Trump’s country-based tariffs, imposed under the International Emergency Economic Powers Act, or IEEPA, could still be struck down if the Supreme Court rules that Mr. Trump illegally invoked the law to enact tariffs. A ruling is expected as early as Friday.
Depending on how the Supreme Court rules, businesses could be owed billions in refunds for duties they paid on imports last year.
Read More: U.S. trade gap shrinks to lowest level since 2009 as imports fall
