The imbalance jumped to $77.6 billion in May as imports exceeded exports due to pharmaceuticals and semiconductors.
Published July 7, 2026
The U.S. trade deficit soared to $77.6 billion in May due to increased imports of products such as pharmaceuticals, cellphones and semiconductors.
Imports rose 3.3% from April to $395.3 billion, while exports fell 3.2% to $317.7 billion, according to a report released Tuesday by the U.S. Department of Commerce’s Bureau of Economic Analysis and the Census Bureau.
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Overall, the trade gap rose 42.2% month-on-month to $77.6 billion, the largest increase in a year.
The surge comes amid an economy-wide boom in spending on artificial intelligence. Notably, semiconductor imports increased by $1.2 billion.
In the oil and gas sector, oil imports surged to record highs despite the US and Israel’s war against Iran. Crude oil imports increased by $1.5 billion.
Imports of auto parts and engines increased by $2.2 billion. In particular, imports of passenger cars increased by $1 billion. The increase comes as automakers consider moving into the state amid mounting pressure from tariffs.
Toyota announced that it will invest $3.6 billion to expand automobile production in the United States. The Japanese automaker announced that it will transfer production of its Tacoma pickup truck to a plant in San Antonio, Texas, by 2030.
US President Donald Trump hailed the move as a “really big deal” and said in a post on his social media platform Truth Social that “tariffs are working.”
The United States had its largest trade deficits in May with Vietnam ($20.6 billion), Mexico ($20.1 billion), Taiwan ($19.4 billion), China ($14.5 billion), and the European Union ($9.3 billion), while its largest trade surpluses were with the Netherlands ($9.1 billion), Hong Kong ($5.6 billion), Latin America ($4.8 billion), and Australia. United Kingdom ($1.9 billion) and United Kingdom ($1.4 billion), according to the data.
Neighboring Canada’s trade surplus widened for the fourth month in a row, hitting its highest level in four years, as the value of goods shipped to the United States hit its highest level since February 2025, according to Statistics Canada, which also released trade statistics on Tuesday.
Canada’s trade surplus was C$4.24 billion (US$2.98 billion); It increased by 0.9% from the previous month.
