The government has reopened – and updated financial data is now available as a result, including key figures illustrating the impact of reciprocal tariffs on U.S. trade.

Newly released figures from the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) show a 5.1% drop in imports on goods and services for August, landing at $340.4 billion. The BEA also reported $280.8 billion in exports for August, increasing 0.1% from data reported in July.

As a result of the changing import and export numbers, the BEA also reported a $59.6 billion U.S. trade deficit in August, down nearly 24% from July. The data comes after sweeping tariffs across 90 countries took effect August 7.

The data from August is the latest of its kind available. It only accounts for less than a month of the tariffs that took effect on August 7, and was delayed due to the government’s historic 43-day shutdown – the longest one in American history.

Contextualizing the Numbers

The data make sense given how businesses have responded to Trump’s reciprocal tariffs over the last several months. According to the 2025 Reshoring Survey, 59% of contract manufacturers have already reshored, are actively reshoring or are considering doing so. Several promo companies have developed tariff-specific strategies, which include decreasing investments in foreign manufacturing, diversifying sourcing and increasing U.S. manufacturing activity to account for geopolitical uncertainty. Whether this approach will prove effective from a pricing perspective – and what role AI and automation will play in saving domestic manufacturing costs – remains to be seen.

Economist Mary Kelly, Ph.D., who spoke about how businesses can weather economic uncertainty at the 2025 ASI Power Summit, believes that maintaining a healthy trade deficit is an important measure of continued U.S. economic success, especially as it relates to the difficulty of finding workers for manufacturing jobs.

“We are the wealthiest nation on the planet, which means we have a tendency to import more than we export, and that’s a good thing,” she said at the summit. “The reality is there is zero chance that any of your kids are going to go work in a Nike factory sewing soccer balls. That is just not what we do here because we have other opportunities, and we’re very lucky to have that.”

The August numbers show that U.S. imports still exceed its exports, though the gap is beginning to narrow.

Trade data has been anything but steady over the last year. The deficit increased significantly from late 2024 to early 2025, reaching $120 billion in February and growing to $136 billion in March. It then dropped to $60 billion in April, notably right around the time President Trump first announced the reciprocal tariffs that would later take effect. The deficit hasn’t returned to $100 billion since the end of last year.

A Return to Domestic Production

In many ways, the numbers show that Trump’s tariffs are beginning to signal a shift in bringing manufacturing back to the U.S. A decrease in global imports has fueled a growing trend toward domestic production, though it’s likely too early to tell whether the pattern will continue at its current rate of change or level out.

“The good news for trade and the U.S. economy is the tariffs are working,” Christopher Rupkey, chief economist at FWDBONDS told Reuters. “The bad news for trade and the U.S. economy is the tariffs are working. Markets and Federal Reserve officials will scramble to find which is true, but maybe both are.”

Demand for products made in the USA has spiked over the last year, with suppliers including All American Writing Instruments (AAWI, asi/76811), Royal Apparel (asi/83731) and LBU inc (asi/65952) reporting earlier this year they were seeing significant sales growth fueled by the demand for domestic products.

“I am certain that our position as a USA manufacturer has had a strong impact on our positive numbers so far this year,” AAWI Vice President of Sales Colleen Shea told ASI Media in April.

But some trade experts warn the “Made-in-USA” phenomenon won’t save businesses money in the long run.

Babak Hafezi, an adjunct professor of international business at American University and the CEO of Hafezi Capital, says that’s because the cost of labor in the U.S. is significantly higher than other countries. However, leveraging AI and automation can help businesses watch their wallets while avoiding steep tariffs.

“The cost of labor is dramatically different in the U.S. than [it is] somewhere else, and the automation factor is where you get that competitive advantage,” Hafezi said on a recent episode of ASI’s Promo Insiders.

Numerous Factors Contribute to a Shrinking Trade Deficit

Several economists saw these trade changes coming when the president announced the tariffs. “If President Donald Trump manages to shrink the U.S. trade deficit, it will be because he drove away foreign investment and slowed U.S. economic growth,” wrote researchers Tamim Bayoumi and Joseph E. Gagnon in a July report for the Peterson Institute for International Economics.

They added that the weakening value of the U.S. dollar could also contribute to a shrink in the trade deficit.

“The dollar’s devaluation the past year has been about 11% and they expect another 10% devaluation in 2026,” said Hafezi, who specializes in providing international market entry services and trade analyses to corporate clients. The dollar’s devaluation could make tariffs hit businesses even harder than anticipated, he says.

“A 15% tariff is now a 20%-26% tariff when you include the imports as they relate to foreign goods,” Hafezi added.

Interest Rate Activity in Limbo

According to a Morgan Stanley report released over the summer, the depreciation of the dollar is, indeed, far from over.

“We’re likely at the intermission rather than the finale,” said David Adams, head of G10 FX Strategy at Morgan Stanley, as reported by the financial institution. “The second act for the dollar’s weakening should come over the next 12 months as U.S. interest rates and growth converge with those of the rest of the world.”

75%-4%

The Fed’s benchmark interest rate, as of November 2025. Further rate cuts were originally expected but may not happen this year.

The Federal Reserve cut interest rates twice this year, with the benchmark interest rate now hovering around the 3.75%-4% range. Federal Reserve Chair Jerome Powell originally teased a third rate cut before the end of the year, but walked that promise back after the government shutdown limited visibility into key economic figures. Now that the government is up and running again, analysts are split as to whether the Fed’s December meeting will result in a third cut – or if it will be pushed to the new year.

As the BEA continues to crunch the numbers over the next several months, it should offer more clarity into a potential correlation between Trump’s tariffs and the shrinking trade deficit. A scheduled date has not been confirmed for the BEA’s next release.