The politically-sensitive US trade deficit jumped to a five-month high in May as imports of cars hit the highest on record, according to government data released today.
The trade deficit with Mexico, a country President Donald Trump threatened with stinging tariffs, rose to its highest in a decade, according to the Commerce Department report.
Financial markets in May were whipsawed by the shifting uncertainties of Trump's trade wars, and fears of the impact of more tariffs on the US economy.
This data should prove frustrating for the president, who has made eliminating the deficit a signature goal of his administration, saying it is a sign other countries are stealing from the US.
The US trade gap jumped 8.4 % to $55.5 billion, seasonally adjusted, well above analyst forecasts.
That surge combined with the April trade gap, which was revised higher than originally reported, could weigh on growth forecasts for the second quarter.
May was another challenging month for global trade.
Trump threatened to stifle commerce with major partners, trade talks with China nearly collapsed and Trump threatened to impose duties on all Chinese imports as well as on all goods from Mexico in a dispute over migrants at the southern border.
Those dangers have receded for the moment following truces with Beijing and Mexico City.
But while those positive turns remained uncertain, importers may have rushed in to lock in lower prices and rebuild inventories.
Imports of goods and services rose 3.3% to $266.2 billion in the latest month, the largest jump in more than four years as Americans bought more passenger cars, crude oil, semiconductors and consumer items, the report said.
At $33.2 billion, imports of cars and parts were the higherst ever on record.
US exports also rose but by a slower 2%, although consumer goods were the highest on record at $18.1 billion.
The report showed the extent to which trade relations were reorienting themselves amid Trump's aggressive stance.
In the first five months of the year, the trade deficit has risen 6.4% to $261.4 billion compared to the same time in 2018.
But it has fallen 10.5%with China, which has traditionally been the largest feeder of America's import splurges.
The deficit with Mexico has increased 35% to $40.4 billion, and in May hit $9 billion, the highest since seasonally adjusted records began in 2009.
With the European Union, the US deficit was up 7.3% to $72.3 billion so far this year.