Containers and cranes at the Bayport Container Terminal at the Port of Houston in Seabrook, Texas on June 12. (Mark Felix/Bloomberg)
key takeaways:
- The US trade deficit widened in May due to a broad increase in imports and a decline in exports, making the gap the largest in more than a year. Trade gap in goods and services increased 42.2% from last month to $77.6 billion, Commerce Department
- The increase reflects strong domestic demand, a stronger dollar and potential front-loading of imports ahead of tariffs, with capital goods and consumer imports reaching higher levels.
- The data is likely to weigh on second-quarter GDP estimates, as economists said net exports may decline more than they grew in the first quarter.
The US trade deficit widened in May due to a broad increase in imports and a decline in exports, making the gap the largest in more than a year.
Commerce Department data on July 7 showed the trade gap in goods and services widened 42.2% from the previous month to $77.6 billion. The average estimate in a Bloomberg survey of economists had projected a deficit of $78.4 billion.
Exports by value declined 3.2% in May due to a decline in the volatile non-monetary gold category. Imports rose 3.3% to the highest level since March 2025, led by sweeping tariffs announced next month by President Donald Trump.
The widening losses follow months in which increased oil and petroleum exports from the Iran war have helped offset ongoing growth in imports of capital goods tied to the construction of data centers in the US. The broad jump in imports in May may reflect a rush to get goods into the country ahead of additional tariffs, according to Sal Guatieri, a senior economist at BMO Capital Markets.
“For a change, this increase was not caused by increased purchases of computer hardware and microchips,” Guatieri said in a note. “Strong domestic demand and a strong dollar are likely supporting factors.”
According to the report, oil exports continued to increase in May. According to the latest weekly data from the Energy Information Administration, as of June 26, oil and petroleum product exports have largely returned to pre-war levels.
🆕country’s #InternationalTrade The deficit in goods and services increased from $54.6 billion in April to $77.6 billion in May due to declining exports and increased imports.https://t.co/jqYjiaHsvj #CensusEconData@BEA_News pic.twitter.com/8RNGwWmJ7r
– US Census Bureau (@uscensusbureau) 7 July 2026
Meanwhile, data for July 7 showed that imports of computer accessories and semiconductors rose again in May, while imports of computer and telecommunications equipment declined.
According to the report, the broad capital goods category which includes such components reached a new record in May. The data also showed strong growth in imports of consumer goods, industrial supplies and materials and automotive vehicles, parts and engines.
Recent surveys of purchasing managers suggest that imports may also increase from U.S. companies stockpiling goods in an effort to prevent war-related supply chain disruptions and price increases.
May trade data will help economists tighten their forecast for second-quarter gross domestic product. Ahead of the data, the Federal Reserve Bank of Atlanta’s GDPNow forecast indicated net exports cut 1.62 percentage points from second-quarter gross domestic product — larger than the 0.37 percentage-point cut in the first quarter.
Cox Fleet’s Kevin Clark discusses how fleets must rethink their maintenance strategies to remain efficient and flexible. Tune in by going above or RoadSigns.ttnews.com.
While many of Trump’s tariffs were struck down by the Supreme Court earlier this year, the administration is exploring other avenues to curb imports. The US also recently decided it will not renew its trade agreements with Canada and Mexico, instead conducting an annual review, which could prompt additional uncertainty for companies in the coming months.
The report showed that the US goods trade deficit with Mexico and Vietnam – a major beneficiary of supply chain changes since trade tensions between the US and China escalated in Trump’s first term – widened to a record in May. Differences with Canada and China also increased.
Ahead of the FIFA World Cup, which started last month, travel exports – or spending by foreign visitors to the US – increased.
On an inflation-adjusted basis, the merchandise trade deficit widened to $100 billion, the highest since March 2025.
