US trade deficit surges amid artificial intelligence spending boom | Business and Economy News
U.S. Trade Deficit Hits $77.6 Billion in May
By Andy Hirschfeld
Published July 7, 2026
The United States trade deficit reached $77.6 billion in May, driven largely by an increase in imports of pharmaceuticals, mobile phones, and semiconductors. This significant rise in the trade gap marks a 42.2 percent increase from the previous month, the largest monthly jump in a year.
According to a report from the U.S. Department of Commerce’s Bureau of Economic Analysis and the Census Bureau, imports rose by 3.3 percent to $395.3 billion, while exports declined by 3.2 percent to $317.7 billion.
The surge in imports coincided with increased spending on artificial intelligence across various sectors of the economy, contributing to a $1.2 billion rise in semiconductor imports. Additionally, petroleum imports reached record levels despite ongoing geopolitical tensions in the region, with crude oil imports increasing by $1.5 billion.
The automotive sector also experienced notable growth, with imports of automotive parts and engines rising by $2.2 billion, and passenger car imports increasing by $1 billion. This trend is part of a broader strategy as car manufacturers seek to enhance domestic production in response to tariff pressures.
In related news, Toyota announced a $3.6 billion investment to expand its U.S. automotive production, including plans to shift production of the Tacoma pickup truck to a facility in San Antonio, Texas, by 2030.
In total, the United States registered 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). Conversely, the U.S. enjoyed its largest trade surpluses with the Netherlands ($9.1 billion), Hong Kong ($5.6 billion), South and Central America ($4.8 billion), Australia ($1.9 billion), and the United Kingdom ($1.4 billion).
Meanwhile, Canada reported a widening trade surplus for the fourth consecutive month, which reached a four-year high of 4.24 billion Canadian dollars (approximately $2.98 billion). Goods shipped from Canada to the U.S. hit their highest level since February 2025, according to Statistics Canada.