Former U.S. President Donald Trump celebrated a significant 55% drop in the trade deficit on social media, stating "Thank you, Tariff Man." However, the latest data shows that as of May 2026, the U.S. trade deficit in goods and services decreased by $203.9 billion year-over-year, a 40.6% reduction, primarily due to a $164.7 billion increase in exports and a $39.2 billion decrease in imports. Yet, the deficit in May actually expanded month-over-month to $77.6 billion, higher than April's $54.6 billion.

Economists are divided on the role of tariffs in the declining trade deficit and whether their benefits outweigh the higher costs faced by American businesses and consumers. Research by the Federal Reserve Bank of New York found that nearly 90% of tariff costs are borne by U.S. businesses and consumers. Donald Trump had proposed using tariff revenue to fund a "tariff dividend," but it has not yet been approved.