US trade deficit surges amid artificial intelligence spending boom

Imbalance soars to $77.6bn in May as imports outpaced exports, driven by pharmaceuticals and semiconductors.The United States trade deficit has jumped to $77.6bn in May on rising imports, driven by goods that include pharmaceuticals, mobile phones and semiconductors.Imports ticked up 3.3 percent from April to $395.3bn while exports fell 3.2 percent to $317.7bn, according to a report released on Tuesday by the US Department of Commerce’s Bureau of Economic Analysis and the Census Bureau.Recommended Stories list of 4 itemslist 1 of 4China sentences former local official to death in $324m corruption caselist 2 of 4After Iran war upheaval, global shipping eyes return to status quolist 3 of 4Displaced Gaza farmers turn to dirt near tents to grow cropslist 4 of 4How much does playing in the World Cup pay?end of listOverall, the trade gap grew by 42.2 percent from the previous month to $77.6bn, marking the biggest jump in a year.The surge came amid a boom in Artificial Intelligence spending across the economy. Notably, semiconductor imports jumped by $1.2bn.In the oil and gas sector, petroleum imports jumped to their highest level on record despite the US-Israel war on Iran. Imports of crude oil increased by $1.5bn.Imports of automotive parts and engines jumped by $2.2bn. Passenger car imports specifically increased by $1bn. The increases came as carmakers look to move stateside amid heightened pressure from tariffs.Toyota announced it would invest $3.6bn in expanding its US auto production. The Japanese automaker said it will move production of its Tacoma pick-up truck to a plant in San Antonio, Texas, by 2030.US President Donald Trump touted the move, calling it “a really big deal”, and said “tariffs at work” in a post on his social media platform, Truth Social.The US posted its largest trade deficits in May with Vietnam ($20.6bn), Mexico ($20.1bn), Taiwan ($19.4bn), China ($14.5bn) and the European Union ($9.3bn) while its biggest trade surpluses were with the Netherlands ($9.1bn), Hong Kong ($5.6bn), South and Central America ($4.8bn), Australia ($1.9bn) and the United Kingdom ($1.4bn), according to the data.