The US trade deficit jumped 42.2% in May 2026 to $77.6 billion, the highest level in more than a year, the Department of Commerce and Census Bureau reported July 7 [1, 2, 3, 4, 5, 6].
Imports rose 3.3% to $395.3 billion, the largest since March 2025, while exports slipped 3.2% to $317.7 billion [1, 2, 3, 4, 5, 6]. The surge in imports was driven partly by capital goods purchases, which hit a record high of $128 billion in May. Analysts attributed much of this to investment in artificial intelligence technologies [1, 3, 5, 6].
Imports included sharp rises in semiconductors (up $1.0–$1.2 billion), computer accessories (+$1.2 billion), automotive parts (+$2.2 billion), and passenger cars (+$1 billion) [2, 4, 6]. However, some observers noted the increase may also reflect broad domestic demand and a strong dollar rather than just AI spending [5]. Citigroup economist Veronica Clark said imports of computer and related equipment showed signs of slowing so far this quarter, indicating AI-related imports may have a smaller GDP impact than in prior quarters [6]. Nationwide economist Oren Klachkin said imports signal strong US demand and robust AI investment continuing on a solid track [6].
US exports of petroleum products hit record highs amid Middle East geopolitical tensions, partially offsetting the overall export decline [1, 2, 5].
The largest US trade deficits in May were with Vietnam ($20.6 billion), Mexico ($20.1 billion), Taiwan ($19.4 billion), China ($14.5 billion), and the European Union ($9.3 billion) [2, 6]. Canadian trade, by contrast, showed improvement, with its surplus rising to 4.24 billion Canadian dollars (US$2.98 billion), a four-year high [2].
The widening trade deficit is projected to subtract from US GDP growth in the second quarter. The Atlanta Fed's GDP model forecasts a 1.2% annualized growth rate in Q2, down sharply from 2.1% in the first quarter [1, 4, 5].
