In October, the trade gap dropped to $29.4 billion, down 39% from the previous month|Downtowngal|CC BY-SA 4.0
The US trade deficit fell 39% last October from the month prior, according to data released by the Commerce Department yesterday.
In October, the trade gap dropped to $29.4 billion, reaching its lowest level since mid-2009. Exports rose 2.6%, while imports declined 3.2%, signaling stronger demand for US goods and reduced reliance on foreign products.
The reduced export-import gap comes six months after President Donald Trump introduced new tariffs.
Tariffs seem to be working
While critics feared retaliation and slower global trade, the latest numbers show US products continue to sell well abroad. Still, the trade deficit from January to October remains 7.7% higher than the same period in 2024.
The month-to-month decline in October was driven by volatility in a few products: a sharp increase in gold shipments overseas accounted for nearly 90% of the growth in exports, while imports fell mainly because pharmaceutical purchases dropped after companies stockpiled imported medicines amid tariff fears.
Economists say the shrinking deficit could lift fourth-quarter growth, which was hurt by the federal government shutdown. Productivity also strengthened the outlook.
The Bureau of Labor Statistics reported Q3 productivity jumped 4.9%, while unit labor costs fell 1.9%, easing inflation pressure.