Most economists see the U.S. trade deficit as an unavoidable consequence, but also a reliable symptom, of macroeconomic success
Economists are leery of attributing personal blame on anyone for this or that macroeconomic aggregate. Non-economists aren’t so careful: If it happens on a politician’s watch, he owns it. Donald Trump has been president for 775 days now, three-quarters the length of the Kennedy presidency . The U.S. trade deficit, whose supposedly disgusting, disgraceful size Trump ran against in 2016, is now effectively his. He owns it.
The U.S. economy is currently producing around US$21 trillion of GDP a year so the deficit in goods trade is a little over four per cent a year. “Bigger than ever” is a favourite Trump phrase, although I suppose he’s reluctant to boast about what he regards as a bigger-than-ever bad thing. When you get down to it, tariffs and other trade barriers aren’t the main influence on national trade deficits or surpluses. Rather, Trump’s main “culpability” in trade is that his cuts in taxes and regulations have the U.S. economy outperforming most of the rest of the world. Future economic historians will carefully weigh all the evidence on whether there really has been a Trump bump in economic activity, so come back in 30 years for the definitive answer.
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