TAG Industrial Watch: August 29 2026

According to the U.S. Census Bureau, merchandise imports soared to $332.5 billion (not seasonally adjusted) during the month of July, jumping 13.8% annually to the highest level since March 2025. Just like the spike during Q1 2025, tariff front-loading is once again credited as the major contributing factor to the recent surge in imports. While news articles have focused on retailers stocking up for the holidays, consumer goods imports actually fell -2.6% annually in July. The increase in imports largely came from the Capital Goods category (up 47.5%), where industrial computers have accounted for the lion’s share of the increase in imports thanks to the A.I. boom.

Not to be outclassed, exports were up 12.4% annually in July, despite the trade deficit ballooning to the highest level since last March at -$135.3 billion. While it is tempting for industrial investors to continue to focus on traditional assets that cater to imports, it’s important to understand what’s behind the recent surge in foreign goods. With a new round of tariffs in effect, including a brewing trade war with Canada, imports could soon come back down to earth, especially if and when the A.I. boom cools off. Whereas the rise of exports, thus far driven by international demand for precious metals and oil, represents a long-term fundamental change for the U.S. industrial market and overall economy.​​​​​​