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- October 19, 202616°
- BIST10011,430-2.49%
- USD49.45+0.05%
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- INTEREST37.00%-1.00
- BITCOIN81,872-0.17%
- October 19, 202616°
US trade deficit surges on AI spending as oil imports hit record
The US trade deficit rose to $77.6 billion in May as imports increased. While AI investments boosted semiconductor imports, oil imports hit a record despite the US-Israel war on Iran.
The boom in AI spending in the US economy caused a large trade deficit. According to the US Commerce Department, the trade deficit in May rose 42.2% from the previous month to $77.6 billion.
Imports rose 3.3% to $395.3 billion, while exports fell 3.2% to $317.7 billion. The sharp rise in the deficit is directly linked to a $1.2 billion increase in semiconductor imports.
In the oil and gas sector, a notable development occurred. Despite the US-Israel war on Iran, crude oil imports rose by $1.5 billion to a record level.
The automotive sector also saw an increase in imports. Imports of automotive parts and engines rose by $2.2 billion, and passenger car imports increased by $1 billion. This increase occurred as automakers continued efforts to shift production to the US due to tariffs.
Japanese auto giant Toyota announced it would invest $3.6 billion to expand its US production in line with this trend. The company will move production of its Tacoma pickup truck to its plant in San Antonio, Texas, by 2030.
US President Donald Trump, in a post on his social media platform Truth Social, described Toyota's decision as 'a really big deal' and said 'tariffs at work'.
The US's largest trade deficits in May were with Vietnam ($20.6 billion), Mexico ($20.1 billion), Taiwan ($19.4 billion), China ($14.5 billion), and the European Union ($9.3 billion). The largest trade surpluses were recorded with the Netherlands ($9.1 billion), Hong Kong ($5.6 billion), South and Central America ($4.8 billion), Australia ($1.9 billion), and the United Kingdom ($1.4 billion).
Meanwhile, according to Statistics Canada, the trade surplus of the US's neighbor Canada widened for the fourth consecutive month to a four-year high. Canada's trade surplus rose 0.9% from the previous month to C$4.24 billion (US$2.98 billion).
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