Trade deficit spikes to $77.6 billion as tariffs fail to boost jobs

May saw the U.S. goods and services trade deficit expand to $77.6 billion, marking a 42.2% jump from the previous month and surpassing the average monthly gap of $70.1 billion under the current administration. Imports increased 3.3% to $395.3 billion, largely reflecting record purchases of AI-related capital equipment, while exports slipped 3.2%, undermining the competitiveness of American manufacturers abroad. The piece contends that tariffs function as a domestic tax, burdening importers, businesses, and consumers, and have coincided with private-sector job growth at its 12th-lowest level in four decades, with an average loss of 5,000 jobs each month since the tariffs began.

It highlights that each dollar of the deficit is matched by a capital surplus, much of which flows back as foreign direct investment that has historically boosted productivity and wages. Citing Small Business Administration Administrator Kelly Loeffler’s claim that foreign countries bear most tariff costs, the article references Federal Reserve Bank of New York research showing the opposite. It concludes that tariffs have not altered the fundamental trade balance and have instead strained families and businesses.