U.S. trade has seen notable growth over the past year, with exports and imports both up 13-14% year-on-year in May (Chart 1). This may sound counterintuitive given the protectionist stance of trade policy under the current administration, but the sectors driving these trends have been subject to specific demand shocks. In the case of exports, higher global demand for commodities, like gold and oil, and rising prices for these goods has benefitted the U.S. However, this has not led to a lower trade deficit for the U.S. because imports are being driven higher by domestic demand for AI-related goods. Cumulatively, the ... (full story)