The US trade deficit widened to a two-year high in July, fueled by a surge in imports of goods and partly reflecting stepped-up efforts by companies to ensure adequate supply ahead of a potential dockworkers’ strike.

The numbers: The U.S. international trade deficit widened 7.8% in July to $78.8 billion from a revised $73 billion in the prior month, the Commerce Department said Wednesday.

The U.S. trade deficit widened sharply in July as businesses front-loaded imports in anticipation of higher tariffs on goods, suggesting that trade could remain a drag on economic growth in the third quarter.

The US trade deficit in July expanded to its largest since mid-2022, according to government data released Wednesday, as imports rose more quickly than exports.