Trump Claims Tariffs Will Reduce The Trade Deficit. Let’s Fact Check. -

Trump Claims Tariffs Will Reduce The Trade Deficit. Let’s Fact Check.

Sep 26, 2024Jeremy ParkinsonFinance0

Trump’s Tariff Claims on Truth SocialMay 31, 2023: Remember, I terminated the worst trade deal in USA history, NAFTA, and replaced it with the best, USMCA. Also got China to pay our great FARMERS 28 Billion Dollars in damages!June 19, 2024: The Smoot-Hawley Tariff Act was passed AFTER the Great Depression had already started. If you want to study Tariffs, and how powerful they are, study the administration of President William McKinley. America had so much money they didn’t know what to do with it!August 19, 2024: I will revoke China’s Most Favored Nation Trade Status. I will pass the Trump Reciprocal Trade Act. If China or any other country makes us pay a 100 or 200 percent tariff, we will make them pay a reciprocal tariff of 100 or 200 percent right back. You hurt us, we hurt you! Eye for an Eye.September 2, 2024: In my First Term, we achieved Major Successes to protect American Workers by negotiating Free and Fair Trade Deals, passing the USMCA (U.S./Mexico/Canada), and giving Businesses and their Workers the tools to thrive.
Trade Wars Are Good and Easy to Win

When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!

— Donald J. Trump (@realDonaldTrump) March 2, 2018
Greatest Deal Ever Made

One of the greatest trade deals ever made! Also good for China and our long term relationship. 250 Billion Dollars will be coming back to our Country, and we are now in a great position for a Phase Two start. There has never been anything like this in U.S. history! USMCA NEXT!

— Donald J. Trump (@realDonaldTrump) January 16, 2020
Biggest Trade Deal Ever Made

BIGGEST TRADE DEAL EVER MADE, the USMCA, was signed yesterday and the Fake News Media barely mentioned it. They never thought it could be done. They have zero credibility!

— Donald J. Trump (@realDonaldTrump) January 30, 2020

US Balance of Trade Select Countries Goods Only 2024 Q2
Total Goods Balance of Trade
Trump’s Claims

The Claims: “Remember, I terminated the worst trade deal in USA history, NAFTA, and replaced it with the best.”

“In my First Term, we achieved Major Successes to protect American Workers by negotiating Free and Fair Trade Deals, passing the USMCA (U.S./Mexico/Canada), and giving Businesses and their Workers the tools to thrive.”

Trade Realities

When Trump took office in 2017, the trade deficit with Mexico was $69.06 Billion. It’s now $95.93 billion for just 6 months.

The Mexico+Taiwan+Vietnam (MTV) deficit went from $124.08 billion to $201.59 in the same time frame despite the fact that Biden kept Trump’s tariffs.

At this pace, the 2024 deficit with Mexico would hit $191.86 billion for the full year. The MTV deficit would hit $403.18 billion, and the deficit with China would be $317.56 billion.

When Trump took office in 2017, the total trade deficit was $792 billion. When he left office it was $901 billion. It’s now $660 billion for just 6 months, and Biden continued Trump’s trade policies.

Let’s Give CreditIf you wish to credit to Trump for reducing the full year trade deficit with China from $375.17 billion to ~$317.56 billion, then remember to credit Trump for increasing the MTV deficit from $124.08 billion to ~$403.18 billion.My math suggests (-317.56 minus -375.17) + (-124.08 minus -403.18) = (57.61) + (-279.1) = -221.49 billion.Again, Biden did not touch USMCA or China except to increase tariffs on China.If increasing the MTV trade deficit by 221.49 billion and the total trade deficit by a new projected record is not winning big, then what is?
How Might China Respond?If Trump increased tariffs on China to 60 percent across the board, how might China respond?I have addressed that question previously. Nothing has changed.
China Shock II Is Coming, the EU Will Be Hit Hard, Then the USOn May 17, I commented China Shock II Is Coming, the EU Will Be Hit Hard, Then the US

Germany is feeling the pinch of China shock. But the US is on deck too. A global trade war looms.

German exporters are getting crushed by China. The EU as a whole cannot compete. The US is responding with massive tariffs.

China will retaliate against US tariffs. One way might be to stop exports of rare earth minerals used in cell phones, EV, computers, wind turbines, and military guidance systems.
Critical Materials Risk Assessment by the US Department of EnergyPlease consider a Critical Materials Risk Assessment by the US Department of EnergyThe US Department of Energy has placed some of the rare earth minerals we need for weapons systems, windmills, batteries, and aircraft on a critical materials list.Nearly all of them are mined or refined in China. Yet Biden just blocked production in the US.
Huge Collision Course with ChinaWe approaching eight straight years of the same trade policy started by Trump and continued by Biden.I’m sure glad winning is easy and victory announced.More By This Author:To Those Hard Of Learning, Here’s A Repeat Lesson On Why Sanctions Fail Germany Back In Stagnation, IFO Leading Economic Indicator Sinks AgainHome Builders Are Sitting On A Lot Of Supply They Struggle To Sell