The trade deficit of the United States sharply rose in May 2025 and reached USD 96.6 billion. This is an 11 percent increase from April and 6.5 percent higher than forecasts. This widened gap signals that efforts to reduce the trade imbalance, especially through tariffs imposed by the second Trump administration, have not yielded the intended results. The increase was largely due to a significant drop in exports according to the latest U.S. Census Bureau data.
Exports in May specifically decreased by 5.2 percent compared to the previous month. The drop amounted to USD 179.2 billion. This decline occurred even as imports remained nearly unchanged at USD 275.8 billion. The result was a monthly trade imbalance that surprised many analysts. Some U.S. policymakers have historically viewed the trade deficit as a sign of economic weakness and have attempted to reduce it through various protectionist measures.
Nevertheless, under the second Trump administration, the U.S. imposed tariffs on hundreds of billions of dollars of imports. The Trump tariffs were universal but there has been a special focus on countries like China. The idea was to discourage imports and encourage domestic production. Current data show that tariffs may have temporarily altered trade flows but failed to significantly reduce overall import volumes or bolster exports in a sustained way.
Economists have long argued that the longstanding trade deficits of the United States are shaped more by macroeconomic forces than by tariffs alone. A strong dollar, for example, makes U.S. exports more expensive abroad while making imports cheaper for American consumers. Factors like global supply chains, entrenched consumer preferences, and limited domestic capacity in key industries have also played a critical role in the persistence of the trade gap.
It is also an established fact that tariffs would not be able to bolster U.S. manufacturing. The scale and cost of industrial reshoring are immense. It is also important to factor in the needed technical investments to build a globally competitive American manufacturing sector. There is also the issue about laborers. Labor costs would increase production costs. Outsourcing manufacturing remains the most economical option for most American companies and consumers.
This is not the first time data has challenged the impact of Trump tariffs. For example, in March, the trade deficit reached USD 140.5 billion. This was due in part to a quick surge in pharmaceutical imports as businesses stocked up ahead of expected tariff increases. It is also worth noting that this contributed to a slight contraction in GDP during the first quarter. This shows how trade policy can have unintended microeconomic and macroeconomic consequences.
It has become undeniable that the surge in the trade deficit underlines the limitations of tariffs as a standalone economic strategy. Specifically, while they may shift the timing or source of imports, they do little to address deeper structural issues. The growing trade gap continues to challenge the assumptions of Trump and his policymakers. The situation also adds complexity to the future of U.S. trade policy and greater economic policy under the second Trump admin.