The U.S. trade deficit narrowed in June on a sharp drop in consumer goods imports, and the trade gap with China shrank to its lowest in more than 21 years — the latest evidence of the imprint on global commerce U.S. President Donald Trump is making with sweeping tariffs on imported goods.

Trump's tariffs are leaving their mark on the U.S. economy beyond trade, as a measure of activity in the vast services sector hit stall-speed in July, with businesses saying the swarm of new import taxes is driving up costs and making business planning more difficult.

The overall trade gap narrowed 16.0% in June to $60.2 billion, the Commerce Department's Bureau of Economic Analysis said Tuesday. Days after reporting that the goods trade deficit tumbled 10.8% to its lowest since September 2023, the government said the full deficit including services also was its narrowest since then.