The U.S. trade deficit narrowed 6.6% on a monthly basis to its lowest level in 19 months in May, government data showed July 6, the same-day tariffs on $34 billion of Chinese goods took effect.

The country registered an international trade deficit of $43.1 billion, down $3.0 billion from a revised $46.1 billion in April, according to data from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis. The Econoday consensus estimate was a deficit of $43.7 billion in May.

Exports rose by $4.1 billion from April to $215.3 billion, while imports increased by $1.1 billion to $258.4 billion. The deficit in goods came in at $65.8 billion, down by $2.6 billion from April, while the services surplus rose by about $500 million to $22.7 billion.

The U.S. trade deficit in goods with China widened by $1.2 billion to $32.0 billion on a seasonally adjusted basis, with imports rising by $1.8 billion to $43.7 billion and exports up by about $600 million to $11.7 billion. China on July 6 imposed additional tariffs on about $34 billion of U.S. goods in retaliation to U.S. tariffs on an equivalent value of Chinese products that took effect earlier in the day.

U.S. President Donald Trump said July 5 that his country may eventually impose tariffs on more than $500 billion worth of Chinese goods.

The deficit with the European Union declined by $1.3 billion to $11.9 billion amid a slight increase in exports and a drop in imports. The Financial Times reported that the European Commission is drawing up a new list of U.S. products to be included in retaliatory tariffs on €18 billion of goods as it prepares for Washington's planned additional levies on European-made cars.

The deficits with Mexico and Canada came in at $5.8 billion and $2.2 billion, respectively.