US Trade Deficit Narrows to $105 Billion in September as AI Equipment Imports Surge

The U.S. trade deficit narrowed more than economists expected in September. The Commerce Department reported that the gap fell 0.7% to $105 billion, against a forecast of $108 billion.

Exports rose 1.9%. Imports rose 1.2%. Through the first nine months of the year, the deficit is $92.4 billion smaller than in the same period last year, a 12.2% decline.

Those are the official numbers. What they mean for President Donald Trump's tariff policy is where the fight starts.

The AI buildout is inflating imports

The headline figure would have looked better without one category: data-center hardware. In September, computer imports jumped $7.6 billion and computer accessories rose $5.7 billion. Capital-goods imports overall climbed $11.6 billion.

Harvard economist Jason Furman posted charts on X on Wednesday, Nov. 4, that separate those goods out. He groups computers, computer accessories, semiconductors and telecommunications equipment as "data-center goods."

His charts show the overall deficit at about 2.7% of gross domestic product through September. Strip out data-center goods and it falls to 0.7% of GDP. The comparable figures for the same stretch of earlier years run around 2.2% to 2.3%.

The goods-only deficit excluding data-center equipment is 1.8% of GDP, down from 3.3% in 2024, according to the same charts. The data-center category alone has swollen to roughly 2.1% of GDP, about triple its 2024 share.

The tariff argument

Breitbart Business Digest argues that this proves the tariffs are working. Its case: once AI hardware is set aside, the deficit is shrinking fast, and the headline number would be larger still if tariffs weren't nudging production toward domestic sources.

It also argues that the surge in equipment imports undercuts predictions that tariffs would choke off business investment. The administration's tariff exemptions, it says, preserved access to the gear companies need.

That last point cuts both ways. If exemptions are why the AI buildout continues, the improvement outside data centers is not simply the result of tariffs on everything. Furman's charts show the split in the data. They do not attribute the cause. The claim that the deficit would be bigger without tariffs is an argument, not a measured result.

The German study

The German Economic Institute (IW) reached a less flattering conclusion. Its study, reviewed by Reuters, found that the U.S. goods trade deficit did not fall under Trump's tariffs. It reached $130 billion in August, higher than two years earlier.

The IW did find the deficit's makeup shifted. The European Union's share of the goods deficit dropped to 7% in August from 20% in August 2024. China's share fell to 14% from 29%.

The institute rated the results of Trump's economic program, which combines tax cuts, tariffs and a push to bring factories home, as mixed. GDP growth has held steady and AI-related investment is strong. Job creation has lagged the pace under the previous administration, and inflation remains above the Federal Reserve's 2% target.

The IW also pointed to weak foreign investment. Foreign direct investment into the U.S. fell 8.2% in 2025 to $248 billion, which is 18% below the 2015-2024 average. That undercuts the factory-reshoring goal, at least so far.

Why the numbers don't match

The two sets of figures are not measuring the same thing. The Commerce Department's $105 billion covers goods and services in September. The IW's $130 billion is the goods deficit alone, in August. Goods deficits are larger than the combined figure because the U.S. runs a surplus in services.

The period comparisons differ too. The IW compares August with two years earlier. The Commerce data and Furman's charts compare year-to-date totals against 2024 and 2025. Those choices alone can produce opposite headlines.

What holds across both: the trade partners that make up the deficit are changing, with China and the EU shrinking as shares. And the AI hardware buildout is pulling in imports at a pace large enough to swamp the rest of the picture.

For consumers and businesses, a deficit that falls only when AI spending is excluded is a narrower result than "tariffs shrank the deficit." It is also a bigger one than critics of the policy predicted.

The next test is whether the data-center import surge keeps climbing in the coming monthly releases. If it does, the headline deficit can widen even while the rest of the trade balance improves, and both sides will keep reading the same numbers as vindication.