The U.S. trade deficit is contracting, according to the latest information available from the Commerce Department. In its July 7 report on U.S. trade on May 2022, the Department reported that the trade deficit fell $1.1 billion to $85.5 billion as exports increased by about 1.2% and exports grew only half that.
Despite the positive month-by-month movement, the trade gap is still larger than it was last year by about 38.4%, or $126.5 billion.
Increased exports of goods, which increased $3.0 billion to $179.0 billion, drove much of the latest results. Industrial supplies exports rose by $3.3 billion alone, while consumer goods rose by about $600 million. Exports of foods, feeds, and beverages fell by $1.6 billion, somewhat mitigating the sector-wide growth.
Imports also continued to grow, though at a notably slower rate than exports. Goods imports rose by $100 million in May to $284.0 billion, also driven by more imports of industrial supplies, which rose by $1.8 billion. Consumer goods imports decreased by a similar number, $1.5 billion, leading to tepid overall import growth.
Individual trade deficits with some of the United States’ largest trade partners also fell. Exports to China rose by $500 million while imports fell $2.3 billion, dropping the U.S.-China trade deficit by $2.8 billion to $32.2 billion. The U.S.-Mexico trade deficit fell by $1.6 billion to $9.9 billion as exports rose and imports fell by about $800 billion each. At the same time, though, the U.S.-Canada trade deficit rose by just under a billion dollars to $9.8 billion, driven by $1.1 billion less in exports.
