The U.S. trade deficit surged in July to $63.6 billion, the highest level in 12 years, as imports jumped by a record amount.
The pandemic has caused major disruptions to global trade, depressing the flow of cross-border transactions.
The Commerce Department reported that the July deficit, the gap between what America buys and what it sells to foreigners, was 18.9% higher than the June deficit of $53.5 billion.
The increase was driven by a record 10.9% increase in imports, which rose to $231.7 billion. Exports were also up but by a smaller 8.1%, to $168.1 billion.
When Donald Trump campaigned for president in 2016 he pledged to sharply lower the country’s large trade deficits, especially with China, which for years has been the country with the largest trade surplus with the United States.
But despite a number of high-profile trade battles and a renegotiation of the North American Free Trade Agreement with Canada and Mexico, America’s trade deficits have risen, especially after the United States began easing tariffs Trump imposed early in his presidency.
For July, the deficit with China in goods totaled $31.6 billion, an 11.5% increase from the June imbalance.
The goods deficit with Mexico hit a record high of $10.6 in July. Trump has claimed the new free trade deal he has negotiated with Mexico and China will be a boon for American workers and businesses, but it didn’t officially go into force until July.
The United States ran a deficit in goods trade of $80.1 billion in July, the highest on record. The U.S. surplus in services, such as banking and insurance, declined to $17.4 billion, the smallest services surplus since August 2012.