Is Trump’s tariff policy a dead end? The U.S. trade deficit hit $105.6 billion in August, a new high in more than a year

[Financial Channel/Comprehensive Report] The U.S. Department of Commerce’s latest trade deficit surged 13.7% in August, reaching a total of US$105.6 billion, which not only far exceeded Dow Jones’ original forecast of US$102 billion, but also set a new record for the largest deficit since March 2025, on the eve of Trump’s announcement of “reciprocal” tariffs.

CNBC reported that the main driver of this surge in deficit was the influx of related goods driven by the wave of artificial intelligence (AI) infrastructure in the United States, coupled with market uncertainty about the prospect of import tariffs, which contributed to a significant 4.3% growth in imports that month.

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Although the trade deficit has expanded significantly in a single month, if viewed over a longer period of time, the U.S. trade deficit so far this year is US$138.2 billion, still nearly 20% lower than the same period last year.

Economists point out that increased imports usually exert a drag on gross domestic product (GDP), but if import growth reflects strong domestic demand and consumption, the impact may be offset by other economic activities. Nationwide financial economist Oren Klachkin said that rising prices have amplified the impact of trade frictions, and even so, net trade will still drag down GDP growth in the third quarter.

Krachkin believes that this data does not reflect economic weakness, but "strong domestic demand." Among them, a large number of goods related to AI construction were imported, which also became an important background for the increase in imports in August.

However, after the release of trade data, market expectations for U.S. economic growth in the third quarter have still cooled down. Goldman Sachs lowered its third-quarter GDP growth forecast to 3.1%, 0.3 percentage points lower than the previous forecast; the Atlanta Federal Reserve Bank's GDPNow tracker also lowered its forecast to 3.7%, 0.1 percentage points lower than the previous update.

In other words, although the U.S. trade deficit expanded sharply in August due to the surge in imports, it also showed the duality of AI construction driving commodity imports and domestic demand still supporting it. However, the drag of the trade project itself on GDP growth in the third quarter also prompted the market to further lower its economic growth expectations.

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