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The U.S. trade deficit increased to $88.6 billion in July, representing a 24.4% rise compared to the previous month. This figure exceeded experts' expectations, which had forecast a deficit of around $90 billion. The widening deficit is due to strong domestic demand that pushed imports to a record high of $399.3 billion, driven by increased imports of capital goods, while exports declined by 2.1% to $310.7 billion, mainly due to decreased shipments of industrial materials and oil, despite gains in pharmaceutical and capital goods exports. The trade deficit in goods alone increased by 17.3%, reaching $119.6 billion. Additionally, trade tensions and customs pressures affected trade flows with several countries, despite the implementation of some tariffs. Changes in the services sector also led to a decrease in both imports and exports, impacting the trade balance with countries like Canada and Switzerland. Overall, the growing deficit continues to exert pressure on U.S. economic growth.
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