The U.S. current account deficit experienced a significant reduction in the second quarter of 2025, declining by $188.5 billion (42.9%) to $251.3 billion, following a peak of $439.8 billion in the first quarter. This improvement brought the deficit down to 3.3% of GDP, the lowest level since the third quarter of 2023.
A major factor contributing to this reduction was a substantial decrease in goods imports, which fell by $184.5 billion to $820.2 billion. This decline was primarily due to reduced imports of nonmonetary gold, consumer goods, and crude oil. Conversely, goods exports increased by $11.3 billion, reaching $550.2 billion, while service exports and imports also saw modest gains.
As a result, the goods trade deficit narrowed to $270 billion, marking the smallest gap since the fourth quarter of 2023. Both income receipts and payments rose, although transfers experienced a slight decline.
These developments were influenced in part by the volatility in trade flows resulting from President Donald Trump’s tariffs and broader economic policies, which have prompted discussions about the future role of the dollar in international markets.
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