Tariffs Are Bringing Down the Trade Deficit While Allowing the AI Boom to Continue

America’s trade deficit narrowed unexpectedly in September, and the gap through the first nine months of the year was 12.2 percent smaller than a year earlier. President Donald Trump’s trade policies appear to be doing exactly what critics said they could not: shrinking the trade deficit.

The Commerce Department reported Wednesday that the deficit fell 0.7 percent to $105 billion, below the $108 billion economists expected. Exports increased 1.9 percent, outpacing a 1.2 percent rise in imports. Through September, the deficit was $92.4 billion smaller than during the same period last year.

That improvement came despite another enormous increase in purchases of equipment for America’s artificial intelligence buildout. Computer imports jumped $7.6 billion in September, while computer accessories rose $5.7 billion. Capital-goods imports overall increased $11.6 billion.

Those purchases explain why the headline deficit conceals a much bigger improvement elsewhere.