The US trade deficit widened sharply in May 2026, jumping 42.2% from the previous month to $77.6 billion — the largest monthly trade gap the country has recorded in more than a year.

According to data released by the U.S. Census Bureau and the Bureau of Economic Analysis, the sudden spike was driven by a surge in imports combined with a decline in exports, as businesses rushed to bring in goods ahead of possible new tariffs.

How Big Was the Jump in the US Trade Deficit?

The trade gap climbed from a revised $54.6 billion in April to $77.6 billion in May — an increase of $23 billion in a single month. This marks the highest deficit level since March 2025.

• Total imports: rose 3.3% to $395.3 billion
• Total exports: fell 3.2% to $317.7 billion
• Goods deficit: widened by $23.6 billion to $106.5 billion
• Services surplus: edged up $0.6 billion to $28.9 billion

Why Did US Imports Rise So Sharply?

Analysts point to two overlapping forces behind May’s import surge: businesses front-loading shipments ahead of anticipated new tariffs, and a continued boom in artificial intelligence-related spending.

AI and Semiconductor Demand Driving Capital Goods Imports

Capital goods imports climbed to a record high of $128 billion, fueled largely by computer accessories and semiconductors. Businesses across the country are investing heavily in AI infrastructure, and that buildup depends heavily on imported hardware.

Citigroup economist Veronica Clark noted that while AI investment is likely to stay strong, computer and related equipment imports have slowed in recent quarterly data, suggesting the boost to GDP growth from AI-related components may be smaller going forward than in prior quarters.

Pharmaceutical and Consumer Goods Stockpiling

Consumer goods imports also rose, driven by increases in pharmaceutical preparations, cellphones, and other household goods. Industry watchers say pharmaceutical companies likely imported raw materials and finished drugs early, anticipating that new tariffs could raise costs later in the year.

Tariff Front-Running Adds to the Picture

Much of the surge appears tied to companies racing to import goods before new duties take effect. This pattern echoed a similar spike seen in April 2025, when businesses rushed shipments ahead of an earlier round of tariffs.

Although the U.S. Supreme Court struck down an earlier set of tariffs, the White House has since introduced a global duty, and new Section 301 duties have reportedly been proposed, keeping importers on edge about further cost increases.

Strong Domestic Demand Also Playing a Role

Beyond tariff-related stockpiling, economists say resilient consumer demand within the U.S. economy is keeping import volumes elevated. Steady household consumption and ongoing industrial production needs continue to pull in supplies from abroad.

Oil Exports Hit a Record Despite Falling Overall Exports

While total exports fell overall, one category stood out: petroleum. Crude oil shipments rose $2 billion, pushing petroleum exports to a record high of $38.4 billion. The U.S. remains a net oil exporter.

The jump in oil exports has been linked to Middle East supply disruptions. Conflict-related closures affecting the Strait of Hormuz — a critical corridor off Iran’s southern coast — squeezed regional supply chains and boosted demand for American crude, benefiting U.S. producers even as broader export figures declined.

As tensions between the U.S. and Iran have eased somewhat following their recent truce, shipping through the strait has gradually normalized, and analysts expect U.S. petroleum exports to drift back toward pre-conflict levels in the coming months.

What This Means for GDP

Trade figures feed directly into GDP calculations, and a widening deficit has already raised concern among economists. Capital Economics’ North America economist Bradly Saunders said the sharp widening isn’t quite as damaging to GDP as the headline number suggests, but it still signals that net trade is acting as a meaningful drag on second-quarter growth.

The Atlanta Federal Reserve’s GDPNow model is currently projecting second-quarter growth of around 1.4% annualized, down from 2.1% in the first quarter of the year.

Trade Deficits by Country

The widest bilateral deficits in May were recorded with:

• Vietnam: $20.6 billion
• Mexico: $20.1 billion
• Taiwan: $19.4 billion
• China: $14.5 billion
• European Union: $9.3 billion

Meanwhile, the U.S. posted trade surpluses with the Netherlands ($9.1 billion), Hong Kong ($5.6 billion), and South and Central America ($4.8 billion), among others.

What Comes Next?

Economists say the direction of the U.S. trade deficit in coming months will largely hinge on:

• Whether new tariff policy takes effect
• Global demand trends
• Energy market stability
• Continued AI-related hardware imports

Whether May’s sharp swing turns out to be a lasting trend or a temporary blip tied to tariff front-running should become clearer once June trade data is released.

Sources: U.S. Bureau of Economic Analysis, Reuters via Yahoo Finance, Al Jazeera, Bloomberg. This article is based on official Commerce Department data released July 7, 2026.