The U.S. trade deficit, which had sharply declined due to the tariff policies implemented by the Donald Trump administration, widened again in May.
On July 3 (local time), the U.S. Department of Commerce announced that the U.S. trade deficit in May 2025 was $71.5 billion, an increase of $11.3 billion (18.7%) from the previous month. The deficit slightly exceeded the $71.2 billion deficit forecasted by experts surveyed by Dow Jones.
The U.S. trade deficit had surged through March due to businesses stockpiling inventories ahead of tariff implementation, but then dropped sharply in April, particularly for countries and products subject to high tariffs.
Imports in May showed little change from the previous month, but exports decreased, contributing to the widening deficit. Imports in May totaled $350.5 billion, down $300 million (-0.1%) from the previous month, marking the lowest level since October 2024 ($343.8 billion). In contrast, exports fell by $11.6 billion (-4.0%) to $279.0 billion, a larger decrease than imports.
President Trump announced so-called "reciprocal tariffs" for each country on April 2, designated as "Liberation Day." The basic tariff rate of 10% took effect on April 5, but additional country-specific tariffs have been deferred for 90 days until July 8.
China, in retaliation, was excluded from the tariff deferral and raised its tariff rate to 145%. However, after the U.S. and China agreed to a 90-day deferral on May 12, the rate was lowered to 30%. Due to the effects of the "bombshell tariffs" on China that persisted through mid-May, the U.S. trade deficit with China was $13.9 billion, the lowest level in five years since March 2020 ($11.7 billion), at the onset of the pandemic.
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