New data from the Commerce Department shows the U.S. trade deficit shrinking significantly in 2026, with President Donald Trumpâs tariff policies credited for driving the improvementâeven as massive imports for artificial intelligence infrastructure obscure the full scale of gains.
The overall trade deficit fell 0.7% in September to $105 billion, below economist projections. Through the first nine months of the year, the gap was 12.2% smaller than the same period in 2025. Exports grew 1.9% while imports rose 1.2%, signaling a rebalancing that critics had claimed Trumpâs trade policies couldnât achieve.
AI Imports Distort the Picture
Beneath the headline numbers lies a striking divergence. Harvard economist Jason Furmanâs analysis highlights that excluding data-center equipmentâcomputers, semiconductors, and networking gearâthe trade deficit has plunged to just 0.7% of GDP this year, down from 2.3% in 2025. The goods-only deficit, minus AI-related imports, fell to 1.8% of GDP from 3.3% two years prior.
This contrast stems from an unprecedented surge in AI infrastructure spending. Computer imports jumped $7.6 billion in September alone, with capital-goods imports overall up $11.6 billion. The administrationâs targeted tariff exemptions for critical tech equipment have allowed this investment boom to continue unimpeded.
How Tariff Exemptions Fuel Growth
Contrary to claims that Trumpâs tariffs would stifle investment, the policyâs carve-outs for AI-related imports have enabled businesses to expand capacity while other sectors reshore production. Computers, chips, and specified networking gear benefit from exclusions, as do qualifying American data centers under a separate advanced-chip tariff.
âThe administration is applying pressure to change trade patterns while preserving access to equipment American businesses need to expand,â the analysis notes. This dual approach has produced what Furmanâs charts reveal: a collapsing non-AI trade deficit alongside breakneck investment in next-generation infrastructure.
The data underscores both the success of protectionist measures in reviving domestic manufacturing and the lingering consequences of offshoringâas U.S. firms still rely heavily on foreign suppliers for cutting-edge equipment. With high-tech reshoring expected to take years, the exemptions ensure the AI revolution wonât stall while that transition unfolds.
Source: www.breitbart.com â https://www.breitbart.com/economy/2026/11/04/breitbart-business-digest-trumps-tariffs-are-bringing-down-the-trade-deficit/