The US trade deficit in goods and services jumped 42.2% in May from the previous month to $77.6 billion, the Commerce Department reported on Tuesday, marking the widest gap since March 2025. The April deficit was revised down to $54.6 billion. The result landed in line with market forecasts, yet viewed from Washington, the data undercut the administration’s argument that aggressive tariffs would quickly narrow the trade gap.

Imports climbed 3.3% to $395.3 billion, driven by pharmaceuticals, telephones, consumer goods, crude oil, and passenger cars. Exports fell 3.2% to $317.7 billion, with declines in gold, other precious metals, and natural gas, though crude oil exports rose after US-Israeli strikes on Iran in late February. The goods deficit widened by $23.6 billion to $106.5 billion, while the services surplus edged up to $28.9 billion.

Analysts in Europe and Latin America point to several forces behind the import surge. Companies accelerated purchases to beat expected tariff hikes, while the war in the Middle East disrupted trade routes and boosted demand for certain commodities. Investment in artificial intelligence also lifted imports of computer equipment and components for data centres. The deficit with Mexico swelled by $5.3 billion to $20.1 billion, and trade with Switzerland swung from a $4.4 billion surplus in April to a $2.3 billion deficit in May.

The Trump administration’s tariff regime, including a 10% baseline duty on most imports imposed after the Supreme Court struck down higher rates in February, has not yet produced the intended reduction in the trade deficit. Retaliatory measures by trading partners are weighing on US exports. The temporary 10% global tariff is set to expire this month, and new Section 301 investigations targeting countries including Brazil are underway. Brazilian officials have opted to skip this week’s hearings in Washington, focusing instead on direct bilateral negotiations. The next milestone is the expiration of the temporary tariff and any announcement on its replacement.