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US trade deficit hits 5-month high as imports from Mexico soar
[WASHINGTON] America's politically-sensitive trade deficit jumped to a five-month high in May as imports of automobiles hit the highest on record, according to government data released Wednesday.
The trade deficit with Mexico, a country President Donald Trump threatened with stinging tariffs, rose to the highest in a decade, according to the Commerce Department report.
The US trade gap jumped 8.4 per cent to US$55.5 billion, seasonally adjusted, which was above analyst forecasts and also the biggest increase since December.
The news should prove frustrating for Mr Trump, who has made eliminating the deficit a signature goal of his administration, saying it is a sign other countries are stealing from the United States.
The surge in the trade deficit in May combined with April which was revised higher than originally reported, could weigh on growth forecasts for the second quarter.
May was another challenging month for global trade, with expectations repeatedly battered by shifting uncertainties as Trump threatened to stifle commerce with major partners amid disagreements over trade and immigration policy.
The dangers have receded for the moment, but importers may have responded by rushing to lock in lower prices and rebuild inventories.
Imports of goods and services rose 3.3 per cent to US$266.2 billion for the month, their largest jump in more than four years as Americans bought more passenger cars, crude oil, semiconductors and consumer items, the report said.
At US$33.2 billion, imports of autos and parts were the most on record.
Exports also rose but by a slower two per cent, although consumer goods were the highest on record at US$18.1 billion.
The report showed the extent to which trade relations were reorienting themselves amid Mr Trump's aggressive stance.
In the first five months of the year, the trade deficit has risen 6.4 per cent to US$261.4 billion compared to the same period in 2018. But it has fallen 10.5 per cent with China, which has traditionally been the largest feeder of America's import splurges.
The deficit with Mexico meanwhile is up 35 per cent to US$40.4 billion, and in May was US$9 billion, the highest since seasonally adjusted records began in 2009.
And with the European Union, the US deficit was up 7.3 per cent to US$72.3 billion.