The Globe and Mail reports in its Wednesday edition that the U.S. trade deficit increased significantly in May, driven by record-high imports of capital goods. A Reuters dispatch to The Globe reports that this trend suggests trade may adversely affect GDP in the second quarter. Businesses aimed to avoid shortages and higher prices due to the Iran war and potential new tariffs, leading to imports reaching a 14-month high, said the Commerce Department. The Iran war boosted oil exports to a record high. While imports may hinder economic growth, their strength indicates resilient domestic demand, partly fueled by an artificial intelligence investment boom. Despite President Donald Trump's tariffs, the deficit reached a 14-month high. Nationwide economist Oren Klachkin says: "Imports convey solid U.S. domestic demand, though inventory frontloading likely lent a hand. AI investment appears to remain on a very solid track." The trade gap increased by 42.2 per cent to $77.6-billion (U.S.), the highest since March, 2025. Economists had anticipated a deficit of $78.5-billion (U.S.). The rise in the deficit partly resulted from higher prices, with imports up 3.3 per cent to $395.3-billion (U.S.), also attributed to a strong dollar.