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Data: U.S. Bureau of Economic Analysis via FRED; Chart: Axios Visuals

The U.S. trade balance fell to a deficit of $63.6 billion in July, $10 billion larger than the month before, and the biggest monthly deficit since July 2008.

Why it matters: The spike in the trade deficit comes despite President Trump's trade war with China and tariffs on hundreds of billions of dollars of imports from China, Europe and other countries, as well as the U.S.-Mexico-Canada trade agreement, which went into effect this year.

  • The increase between the deficit in July 2016 and July 2020 is "especially notable given the drop in trade flows related to the COVID-19 pandemic," liberal think tank Public Citizen’s Global Trade Watch director Lori Wallach said in a statement.
  • "Comparing the trade flows in the first seven months of 2019 to the same period in 2020, U.S. trade has decreased 15%."

By the numbers: The $340 billion trade deficit in the first seven months of 2020 is 12.2% higher than during the same period in 2016.

  • The trade deficit with China was $3 billion more on the month at $31.6 billion.
  • The deficit with Europe also increased $3 billion from the prior month, to $23.1 billion.
  • The July 2020 surplus in services trade was the smallest since August 2012, at $17.4 billion.

But, but, but: While much of Trump's foreign policy has seemed driven by an intolerance for trade deficits, they are not necessarily bad for the economy.

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Restrictions are returning across much of Europe as the continent faces a second coronavirus wave.

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