Rick Newman
·Senior Columnist
As a presidential candidate in 2016, Donald Trump railed against the U.S. trade deficit with the rest of the world, and with China and Mexico in particular. “Biggest trade deficit in many years!” he tweeted in June of 2016. “I will fix it.”
He hasn’t. “Has he lost the battle with the trade deficit? The numbers say yes, absolutely,” Chris Rogers of research firm Panjiva says in the latest episode of the Yahoo Finance Electionomics podcast. “Exports to China actually went down before they came back up. The fact that he's gone to war with other countries and regions in trade has meant they've put tariffs on. So that's cut exports.”
Trump began imposing tariffs on imports from China and many other countries in 2018, with predictable consequences: Most of those countries retaliated with their own tariffs on imports from the United States. Trump has now slapped tariffs on about $355 billion worth of imports, with tariffs ranging from 7.5% to 25%. The American Action Forum estimates the higher cost of tariffs—which are a tax—along with lost efficiency totals around $57 billion per year. That’s not huge in a $20 trillion economy, but it depresses growth slightly rather than boosting it.
As for the trade deficit Trump promised to “fix,” here are the numbers: The total U.S. trade deficit in 2016, including both goods and services, was $481 billion. The trade deficit for the last 12 months, through August, was $599 billion, or 25% larger than the year before Trump took office.
[Check out other episodes of the Electionomics podcast.]
The coronavirus pandemic that exploded early this year has depressed trade, so it’s worth looking at the numbers before the virus struck. The trade deficit in 2019 was $576 billion, essentially the same as during the latest 12-month period. The deficit for the 12-month period ending in February, before the virus exploded in the United States, was $560 billion. There’s no way to slice the numbers in Trump’s favor.