Trade Gap Jumps to $55.5B, Highest in Five Months

(CN) – The overall U.S. trade gap surged to a five-month high of $55.5 billion in May, while the closely watched deficits with both China and Mexico also grew.

The difference between the number of goods and services the United States sells and buys from other countries increased 8.4% in May to the highest level since the 10-year high of $59.9 billion last December.

The goods deficit with China increased 12.2% to $30.2 billion, and the deficit with Mexico also widened by 18.1% to a record high of $9.6 billion.

President Donald Trump has made closing the trade gap with China in particular a top priority in his “America First” agenda, saying the deficit is the result of bad deals by past administrations.

The year-long trade war with Beijing shows no sign of stopping, even as the U.S. and China agreed last week to return to negotiations. In May, the Trump administration levied additional tariffs of up to 25% on $200 billion in Chinese products.

Trump also threatened a 5% tariff on Mexican imports last month, but a deal was reached just days before the tariffs were set to take effect.

Exports to all countries increased by 2% to $210.6 billion in May, while overall imports surged 3.3% to $266.2 billion, according to a Commerce Department report released Wednesday.

Experts say the trade gap will likely persist despite policy changes because it is the result of the fact that Americans buy more than they produce, and imports from other countries are needed to make up for the difference.