The goods deficit for May is the worst looking deficit on paper, at $106.4 billion, but might not be as bad as that number suggests.
The May goods gap is much higher than the year’s high of $86 billion reached in March. But a deeper look at the numbers shows the three month average goods gap is within the normal range for the year – at $62.9 billion – and the Jan-May deficit in goods is down by roughly $200 billion to $440.2 billion.
U.S. export values totaled $210.5 billion, close to March values and above January and February exports. But imports were valued at $317 billion. That’s about $13 billion more than April. What are we looking at in terms of import spikes?
The U.S. goods and services deficit rose 42.2% to $77.6 billion in May, according to the Bureau of Economic Analysis (BEA). However, the total deficit for the year so far is $297.9 billion compared to $501.8 billion in the same five month period of 2025 and down from the $330.2 billion in 2024.
Industrial supplies, led once again by semiconductors and computer equipment used in the AI data center build-out, and consumer discretionary goods saw the biggest spike in value. The BEA data does not reveal volume, so it is not clear if the consumer is buying more or if the consumer is buying less, but spending more. Consumer confidence remains high and rising, the National Association of Manufacturers said on Monday.
The U.S. did import more crude oil in May, but exports balanced that out so that the U.S. registered a roughly $3.9 billion surplus. We are the world’s leading fossil fuels exporter.
Of the items that saw an increase in values in May, pharmaceuticals were the biggest deficit. The U.S. spent roughly $1.8 billion more on pharmaceutical goods in May versus April, importing a total $16.5 billion versus exports of $8.5 billion (which declined from a month ago).
Computer accessories imports rose $1.2 billion to $19.4 billion, while semiconductor imports rose by $1 billion to $11.9 billion in May. By comparison, the U.S. has a substantial deficit in both. Computer accessories exports were valued at $5.8 billion and chips were $6.7 billion, revealing a huge trade gap.
Other items did not really stand out.
Passenger car imports rose by $957 million to $15 billion, but are within the high end of the normal band of import values. So far this year, the U.S. spent $11.9 billion less on car imports.
Car parts and accessories values rose by $762 billion, but again have come in within reason for these items at $12.2 billion. While both are a little on the high end for the year, importers spent $1.3 billion less so far this year.
All food items from fish to nuts saw their monthly import values rise, led by animal proteins. The BEA did not separate beef from poultry in this case. Of all the main food imports, most of them are in decline in value terms versus a year ago except for animal proteins, vegetables and nuts.
Notable Import Declines
A combination of tariffs and high futures prices for copper saw copper imports by $189 million in May to $1.5 billion. Steelmaking materials declined by $123 million to $814 million in imports for May.
The U.S. also took a pause from splurging on AI data center telecom equipment. Computers also saw big declines. Telecom equipment imports declined by $385 million to $13.8 billion and computers fell $3.4 billion to $30.7 billion. Both of these goods are smashing import records on the year, up by $21.3 billion and $85.6 billion, respectively.
All told, the goods deficit of $440 billion suggests the 2026 deficit will likely end the year at around $1.03 trillion. The goods deficit has been over $1.2 trillion in the last two years. To hit the forecasted number, the goods gap needs to return to around $85 billion monthly, which would be a little over the average deficit prior to the jump in May.
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
May Trade Deficit of $106.4 Billion is Not as Bad as it Looks
The goods deficit for May is the worst looking deficit on paper, at $106.4 billion, but might not be as bad as that number suggests.
The May goods gap is much higher than the year’s high of $86 billion reached in March. But a deeper look at the numbers shows the three month average goods gap is within the normal range for the year – at $62.9 billion – and the Jan-May deficit in goods is down by roughly $200 billion to $440.2 billion.
U.S. export values totaled $210.5 billion, close to March values and above January and February exports. But imports were valued at $317 billion. That’s about $13 billion more than April. What are we looking at in terms of import spikes?
The U.S. goods and services deficit rose 42.2% to $77.6 billion in May, according to the Bureau of Economic Analysis (BEA). However, the total deficit for the year so far is $297.9 billion compared to $501.8 billion in the same five month period of 2025 and down from the $330.2 billion in 2024.
Industrial supplies, led once again by semiconductors and computer equipment used in the AI data center build-out, and consumer discretionary goods saw the biggest spike in value. The BEA data does not reveal volume, so it is not clear if the consumer is buying more or if the consumer is buying less, but spending more. Consumer confidence remains high and rising, the National Association of Manufacturers said on Monday.
The U.S. did import more crude oil in May, but exports balanced that out so that the U.S. registered a roughly $3.9 billion surplus. We are the world’s leading fossil fuels exporter.
Of the items that saw an increase in values in May, pharmaceuticals were the biggest deficit. The U.S. spent roughly $1.8 billion more on pharmaceutical goods in May versus April, importing a total $16.5 billion versus exports of $8.5 billion (which declined from a month ago).
Computer accessories imports rose $1.2 billion to $19.4 billion, while semiconductor imports rose by $1 billion to $11.9 billion in May. By comparison, the U.S. has a substantial deficit in both. Computer accessories exports were valued at $5.8 billion and chips were $6.7 billion, revealing a huge trade gap.
Other items did not really stand out.
Passenger car imports rose by $957 million to $15 billion, but are within the high end of the normal band of import values. So far this year, the U.S. spent $11.9 billion less on car imports.
Car parts and accessories values rose by $762 billion, but again have come in within reason for these items at $12.2 billion. While both are a little on the high end for the year, importers spent $1.3 billion less so far this year.
All food items from fish to nuts saw their monthly import values rise, led by animal proteins. The BEA did not separate beef from poultry in this case. Of all the main food imports, most of them are in decline in value terms versus a year ago except for animal proteins, vegetables and nuts.
Notable Import Declines
A combination of tariffs and high futures prices for copper saw copper imports by $189 million in May to $1.5 billion. Steelmaking materials declined by $123 million to $814 million in imports for May.
The U.S. also took a pause from splurging on AI data center telecom equipment. Computers also saw big declines. Telecom equipment imports declined by $385 million to $13.8 billion and computers fell $3.4 billion to $30.7 billion. Both of these goods are smashing import records on the year, up by $21.3 billion and $85.6 billion, respectively.
All told, the goods deficit of $440 billion suggests the 2026 deficit will likely end the year at around $1.03 trillion. The goods deficit has been over $1.2 trillion in the last two years. To hit the forecasted number, the goods gap needs to return to around $85 billion monthly, which would be a little over the average deficit prior to the jump in May.
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
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