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US goods exports tumbled in May at their steepest rate since the coronavirus crisis in 2020, as trading partners cut back purchases of American goods in the wake of President Donald Trump’s “liberation day” tariff blitz.
Exports tallied $179.2bn in May, a $9.7bn — or 5.2 per cent — drop from the previous month’s figure, according to Census Bureau data released on Thursday. That marked a reversal from an increase of 3.5 per cent in April.
Economists said the figures were among the latest to show the distortion in trade caused by the anticipation, and execution, of the US president’s announcement on April 2 to slap tariffs on trading partners. Some of Trump’s steepest levies were paused, but others, including a universal 10 per cent tariff, have gone into effect. There are also numerous other sector-specific tariffs, including on key industrial metals.
“Exports have had a pretty good run in recent months, which likely reflects some anxiety overseas that foreign governments will implement retaliatory tariffs on US products,” said James Knightley, chief international economist at ING.
“Amid the de-escalation phase of the tariff story we are now seeing a bit of an unwind in both imports and exports — but also because warehouses are likely full with companies having brought forward their inventory building.”
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The steepest decline in the May exports data was for industrial supplies. The category, which includes shipments of crude oil and industrial metals, fell 13.6 per cent last month after rising 16 per cent in April. Vehicle exports, which had dropped more than a fifth in April, were up 3.5 per cent.
Economists also warned that a normalisation of unusually large gold exports in April could be skewing the latest data.
Imports in May held steady, resulting in the international trade goods deficit widening more than forecast by Wall Street economists to $96.6bn. But this followed their biggest monthly drop on record in April as the levies prompted companies to slow shipments to the world’s largest economy.
Businesses instead drew on inventories built up in the rush to buy foreign goods before the tariffs came into effect.
Joe Brusuelas, an economist at tax and consulting firm RSM US, said trade data would remain highly volatile “until clarity can be re-established with respect to the level of tariffs coming out of the US”.
