America’s trade gap soared under Trump, final figures show

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The U.S. trade deficit over the four years of President Donald Trump’s presidency soared to its highest level since 2008, despite his tough tariff tactics intended to bring it down, a new Commerce Department report showed on Friday.

The combined U.S. goods and services trade deficit increased to $679 billion in 2020, compared to $481 billion in 2016, the year before Trump took office. The trade deficit in goods alone hit $916 billion, a record high and an increase of about 21 percent from 2016.

Trump failed in one of his major trade policy goals because the U.S. trade deficit is driven more by macroeconomic factors, like how much a country spends and saves, than it is by tariffs and foreign trade practices, analysts said.

“The Trump administration never had a feasible plan for reducing the trade deficit,” explained Mary Lovely, a senior fellow at the Peterson Institute for International Economics. “Their 2017 tax cut ensured that the U.S. as a whole would continue to spend more than it produced, hence the need for a current account deficit. The tariffs on China reduced imports from China, but these were mostly replaced with imports from other sources.”

PragDem

Article URL : https://www.politico.com/news/2021/02/05/2020-trade-figures-trump-failure-deficit-466116

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