US trade deficit widens to biggest in more than a year

The US trade deficit widened in May as a broad-based increase in imports and a decline in exports propelled the gap to the most in more than a year.

The gap in goods and services trade grew 42.2% from the prior month to $77.6 billion, Commerce Department data showed Tuesday. The median estimate in a Bloomberg survey of economists called for a $78.4 billion deficit.

Exports fell 3.2% by value in May, driven by a drop in the volatile non-monetary gold category. Imports rose 3.3% to the highest level since March 2025, in the lead up to President Donald Trump’s sweeping tariffs announced the following month.

The wider deficit follows months in which oil and petroleum exports, boosted by the Iran war, have helped offset an ongoing surge in imports of capital goods tied to the buildout of data centers in the US. The broader jump in imports in May could reflect a rush to bring goods into the country ahead of additional tariffs, according to Sal Guatieri, a senior economist at BMO Capital Markets.

“For a change, the increase wasn’t led by surging purchases of computer hardware and microchips,” Guatieri said in a note. “Sturdy domestic demand and a firmer dollar are likely supporting factors.”

Oil exports continued to increase in May, according to the report. As of June 26, oil and petroleum product exports have largely reverted to prewar levels, according to the latest weekly data from the Energy Information Administration.

Meanwhile, Tuesday’s figures showed imports of computer accessories and semiconductors rose again in May, while imports of computers and telecommunications equipment pulled back.

The broader capital goods category which contains such components advanced to a fresh record in May, according to the report. The figures also showed strong increases in imports of consumer goods, industrial supplies and materials and automotive vehicles, parts and engines.

Recent surveys of purchasing managers suggest imports may have also received a lift from US companies stockpiling merchandise in an effort to front-run war-related supply-chain disruptions and price hikes.

What Bloomberg Economics Says…

“Nominal import growth in May broadened beyond AI-related products, but weaker growth in real imports — especially of capital goods — suggests underlying demand was more subdued.”

— Troy Durie

The May trade data will help economists firm up their estimates for second-quarter gross domestic product. Before the figures, the Federal Reserve Bank of Atlanta’s GDPNow forecast indicated net exports subtracted 1.62 percentage points from second-quarter GDP — more than the 0.37 percentage-point deduction in the first quarter.

While many of Trump’s tariffs were struck down by the Supreme Court earlier this year, the administration is seeking other routes to levy imports. The US has also recently decided it won’t renew its trade deal with Canada and Mexico, pursuing annual reviews instead, which could fuel additional uncertainty for firms in the months to come.

The US goods trade deficits with Mexico and Vietnam — a major beneficiary of supply-chain shifts since trade tensions between the US and China erupted in Trump’s first term — widened to a record in May, the report showed. The gaps with Canada and China also expanded.

Travel exports — or spending by foreign visitors in the US — edged higher, ahead of the FIFA World Cup that kicked off last month.

On an inflation-adjusted basis, the merchandise trade deficit widened to $100 billion, the most since March 2025.

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