The US merchandise-trade deficit unexpectedly widened in May (widening 11.1% to $96.6 billion in May, exceeding the $86.1 billion expectation) on the biggest drop in exports since the onset of the pandemic, while imports were little changed.

Source: Bloomberg

US merchandise exports decreased 5.2% to $179.2 billion in May (the biggest drop since May 2020), reflecting a sharp decline in shipments of industrial supplies such as crude oil.

Source: Bloomberg

Imports were little changed at $275.8 billion, a month after the largest decline on record.

Source: Bloomberg

As a reminder, the figures aren’t adjusted for inflation.

In the first quarter, inbound shipments of foreign goods surged as US companies stocked up on goods and materials ahead of tariffs that President Trump imposed.

The tariff front-running is over... obviously.

As Bloomberg reports, the wider May deficit indicates trade may contribute less to second-quarter growth than initially anticipated. Prior to the latest figures, the Federal Reserve Bank of Atlanta’s GDPNow estimate showed net exports contributing more than 2 percentage points to second-quarter GDP.