I bought a 1020 Specialized Tricross a while back and a recent bike store visit mentioned I am a 5' 7" guy riding with 38mm handle bars. They said I should at least be a 40mm or a 42mm. They said I would breathe better as my chest cavity would expand with a wider arm stance, but the minor negative is there would be less aero dynamics. So I guess I need to replace my handle bars with a Specialized 40mm bar.. So I thought I would ask here in this forum your opinions. Thanks.

Aerodynamics are not a major concern on a cross bike. Comfort, bike handling and power are.

Are you having a problem with your current bars?

Yes - Buy new bars.

No - Ignore the salesmen.

This is B.S. Narrow bars do not make it harder to breathe.

Grab a tape measure or yardstick. Measure out 15" (~38cm) and put your hands that distance apart. Now move one hand 1" out. Do you notice any difference in your ability to breathe? If so, get the bigger bar. For most people, +/-2cm from their optimal bar width won't make any difference. FWIW, I'm 5'7" and race on a 38cm bar.

Bar width has almost nothing to do with rider height. It has everything to do with shoulder width. CX races are not fast enough or long enough for it to matter much. Wider may give you more control but if what you have works why change?