The U.S. trade deficit narrowed sharply in June, falling 16% from the prior month to $60.2 billion, the smallest gap since September 2023 and below economists’ $61 billion consensus, according to Commerce Department data. Imports dropped 3.7% to $337.5 billion as companies pared purchases of consumer goods, vehicles and industrial supplies after front-loading orders earlier in the year to avoid higher import duties. Exports slipped a more modest 0.5% to $277.3 billion. The bilateral shortfall with China shrank by roughly a third to $9.5 billion—its lowest level since 2004—while the gap with Canada was the narrowest since late 2020. Analysts link the shifts to President Donald Trump’s sweeping tariff programme, which has pushed the average U.S. tariff rate to about 18.3%, the highest since the 1930s. A smaller trade gap is expected to bolster second-quarter GDP, which rebounded at a 3% annualised pace after contracting in the first quarter. Economists caution, however, that the escalating tariff regime could restrain both imports and exports in the second half of the year.