The U.S. trade deficit narrowed sharply in June, sliding 16% from May to $60.2 billion, the smallest gap since September 2023, according to Commerce Department data released Tuesday. Economists surveyed by Bloomberg had expected a $61 billion shortfall; the May deficit was revised to $71.7 billion. Imports fell 3.7% to $337.5 billion as companies pulled back after an earlier rush to bring in goods ahead of sweeping tariff increases. Exports edged down 0.5% to $277.3 billion. The drop in consumer goods and industrial supplies led the decline on the import side, while shipments of machinery and civilian aircraft helped cushion the fall in exports. Bilateral imbalances also contracted. The trade gap with China shrank by roughly a third to $9.5 billion, the narrowest since 2004, reflecting a 6.9% slide in imports from the world’s second-largest economy. Deficits with Canada and Mexico retreated as well, with the Canadian gap the smallest since late 2020. June’s figures cap a second quarter in which trade added to the 3% annualised rebound in U.S. GDP after being a drag early in the year. Analysts expect volatility to persist as tariff rates—now averaging about 18%, the highest since the 1930s—rise further when another round of duties takes effect on 7 August.