Torrid 2025 U.S. Trade Slows For Second Consecutive Month

The first-quarter boom in U.S. trade is weakening, with merchandise trade somewhat atypically declining for the second straight month, according to my analysis of the the most recent U.S. Census Bureau data.

U.S. trade with the world fell 1.11% in May from the previous month, the second consecutive monthly decline, following the 12.91% decline in April, government data showed.

It’s a clear sign that the first quarter surge in trade was largely an effort to get goods across the border before April 2 tariffs against the world went into effect.

Partner that with another warning sign: A declining ratio of U.S. exports to imports while the U.S. deficit increases into record territory – like trade falling two months in a row, atypical since the former tends to remain steady even as the deficit increases.

Another warning sign: The percentage of air cargo has exceeded that of ocean cargo. Why? Because air cargo is more nimble than ocean cargo, meaning shipments can get into the country faster, pushing air cargo to a record percentage of trade, as I wrote previously.

Another warning sign, and one of the clearest signs of confusion and skittishness in global markets, is the price of gold and gold trade. As the value of gold has risen sharply, the value of exports in the two major gold categories has topped $42.30 billion this year, up from $14.16 billion last year. The value of imports in those same two categories has topped $82.85 billion, up from $6.78 billion in the first five months of 2024.

Much of that gold moves through JFK International Airport, either bound for or coming from Switzerland, where a majority of the world’s gold is processed.

Looking back, one of the first warning signs was the announcements of the trade war itself, which Trump announced to great fanfare on April 2. It showed a demonstrable lack of forethought. Tariffs on more than 100 countries with which the United States had a deficit? What? Negotiate 90 trade deals in 90 days? Really?

Trump figured this out earlier this month, or let it be known then anyway, as the July 9 deadline loomed. While announcing he would not extend the July 9 deadline, he announced countries could negotiate with the United States until Aug. 2, when the tariffs that were supposed to go into effect April 2 and then July 9 would really go into effect.

“How many deals can you make?” Trump said, in discussing the letters he was planning to send to all the countries with which he hoped to strike deals before Aug. 2. “You can make more deals, but they’re very much more complicated. It’s just so many countries.”

Trump said his “inclination is to send a letter out and say what tariffs they are going to be paying. It’s much easier.”

The May data released on Thursday showed U.S. exports slipping 2.96% from April and U.S. imports rising ever-so-slightly, up 0.16%. Imports dropped 19.42% in April while exports fell 1.25%.

Through the first five months of the year, U.S. trade remains at record levels for total trade, total exports, total imports and total trade deficit.

Total trade is up 11.28% to $2.39 trillion. Total exports are up 5.05% to $894.21 billion. Total imports are up 15.36% to $1.50 trillion. And the deficit has increased 34.87% to $606.48 billion.

Warning signs abound that there are risks, and little chance, of taming the U.S. trade deficit with tariffs. Beyond the fact that the deficit is at a record level.

It’s trade in gold, which is at historic highs, showing grave concern for a risk to inflation and a general lack of market confidence. It’s the percentage of U.S. trade that is an export, which has fallen to historic lows, a sign that the deficit isn’t being tamed at all. It’s the rise of air cargo as a percentage of U.S. trade, showing the impact of the uncertainty. It’s the steam draining from the record pace for U.S. trade, as data for April and May suggests.