Energy exports narrow trade deficit

June 9, 2026

The US trade deficit narrowed 1.2% in April to $55.9 billion from a downwardly revised $56.6 billion. Strong energy exports, higher shipping costs related to the conflict in Iran and a weaker dollar contributed to the deficit’s improvement.

This report included the one-year anniversary of the Liberation Day tariff announcement of April 2, 2025.  The trade deficit has improved 7% from a year ago following major stocking up by firms ahead of tariffs. The deficit remains at a similar level to the early 2020s.  

The Supreme Court decision in February that found emergency powers tariffs unconstitutional initially led importers to stock up under the lower Section 122 tariff rate of 10%. The Administration has proposed replacing the Section 122 tariffs with Section 301 tariffs in late July when the former are set to expire. That is expected to return the effective tariff rate close to its 2025 peak of 11%. Tariff mitigation efforts and industry-specific exemptions will lower that rate over the next two years.

Exports rose 2.6% in March while imports increased 2%. After adjusting for inflation, the real goods deficit decreased 1.8%, more than the headline indicates.  

As we have seen in recent months, gold for investment purposes became a key component of changes in the trade deficit. Exports of nonmonetary gold fell $5.8 billion from March, while imports decreased $0.5 billion.  Leaving out nonmonetary gold, the trade deficit declined 8.1%, once again more than the headline implies. 

Imports excluding gold increased $6.1 billion in April. Capital goods, excluding autos, drove most of the increase, led by computers, semiconductors and telecommunications equipment. Foods, feeds and beverages barely broke even with fruits, food oils and vegetables being mostly offset by green coffee and cocoa beans. The latter two have been subject to steep tariffs and volatile price swings.  

Industrial supplies slipped $0.9 billion on nonmonetary gold, bauxite and aluminum and copper. Tariffs and the closure of the Strait of Hormuz have sent aluminum prices higher. Fertilizer imports declined: a third of global seaborne fertilizer trade is blocked in the strait. Autos, parts and engines edged down $0.5 billion on lower passenger cars and auto parts imports. Consumer goods imports slowed by $0.3 billion on furniture, textile apparel, cell phones and cookware. Pharmaceutical preparations nearly offset the losses from each of those categories, but fell short of pulling broader consumer goods into positive  territory. 

Following an avalanche of chip buying, shortages are appearing. Constrained helium flows from the Strait of Hormuz, needed for semiconductor fabrication, will restrict future supplies. Higher end semiconductors are still being produced, but lower end production has slowed.  

Exports increased $14.2 billion after accounting for nonmonetary gold.  Capital goods jumped $4 billion led by computers, civilian aircraft and computer accessories. Industrial supplies and materials climbed $2.5 billion. Crude oil, fuel oil, other petroleum products, natural gas and natural gas liquids made up $9.8 billion of the increase, offset by nonmonetary gold and precious metals. Skyrocketing fuel prices due to the conflict in Iran caused much of the increase in exports across the energy related categories, which are not adjusted for inflation. Consumer goods exports rose $1.7 billion on gem diamonds, jewelry and artwork.

Autos, parts and engines slipped $0.3 billion with fewer trucks, busses and passenger cars. Foods, feeds and beverages nearly broke even with drags from nuts and meat, while soybeans supported exports. 

The 10% Section 122 tariff made the effective tariff rate lower for some countries while the US dollar measured against a basket of major foreign currencies weakened in 2025, making exports more attractive to international buyers. 

The goods deficit with China fell $2.6 billion to $12 billion due to lower imports. That is near the lowest level since data collection began in 2009.  Trade with Central and South America increased the existing trade surplus by $2.6 billion. The trade surplus with the United Kingdom dropped $3.8 billion as exports slowed.