(What’s Left of) Our Economy: The Final Pre-War and Pre-Supreme Court Trade Data Kept Confirming Trump’s Trade and Tariff Strategy
Ask who never gets charged.
Today’s official report on monthly U.S. trade flows continued two recent trends: The longstanding overall U.S. deficit remained very volatile. But it also kept defying the predictions of practically everyone who claims to know anything about the economy by resuming the substantial fall it began since last April’s “Liberation Day” tariffs began being imposed.
Clashing just as loudly with the conventional wisdom: This major trade balance improvement has come even as growth has been strong – rather than because, as has been typical, a slowing or even shrinking economy has dampened demand for both domestically and foreign-produced goods and services.
In so doing, as with yesterday’s report on consumer inflation, the new trade release (which brings the story up through January) revealed that at least up till the time when the current Iran attacks and the Supreme Court’s decision striking down most of the Trump 2.0 tariffs, the president’s important experiment in economic policy making was proceeding well.
As for the volatility, here’s how the deficit has changed sequentially since last April:
May: Up 17.44 percent
June: Down 18.32 percent
July: Up 28.79 percent
August: Down 24.55 percent
September: Down 12.22 percent
October: Down 36.74 percent
November: Up 80.14 percent
December: Up 30.12 percent
January: Down 25.30 percent
Talk about a rollercoaster!
That latest January narrowing produced a combined goods and services trade deficit of $54.46 billion – very close to the low end of the range reported since Liberation Day. The only fly in the ointment: The December figure was revised up by a big 3.68 percent, from $70.31 billion to $72.90 billion.
As for the trade deficit reduction, since Liberation Day (and counting last April), it’s totaled $582.18 billion. During the last comparable period under the pre-tariff-y Biden administration, that number was $832.09 billion. In other words, it was thirty percent lower.
It’s true that the Biden figure includes the abnormally high numbers from December, 2024 and January, 2025 – when President Trump’s second election victory ignited a burst of importing in order to front-run the tariffs he promised during his campaign. But even before that period, the monthly 2024 Biden numbers were significantly higher than the 2025 Trump numbers.
The trade gap narrowed in January sequentially in part because total exports rose by 5.54 percent, and in part because total imports dipped by 0.72 percent. Exports’ increase brought their monthly level to $302.15 billion – a new record. The old mark of $301.18 billion was set last October. In addition, the monthly increase was the greatest since the 6.81 percent jump in October, 2021.
In other words, so much for widespread predictions that the Trump trade war would spark devastating foreign retaliation. And clear vindication for the administration’s belief that this failure reflects America’s superior leverage in trade diplomacy.
The goods trade deficit has been volatile, too, lately, and shrank by 17.59 percent on month in January, from a downwardly revised $99.25 billion to $81.79 billion. That level was the lowest …
Ask who never gets charged.
Today’s official report on monthly U.S. trade flows continued two recent trends: The longstanding overall U.S. deficit remained very volatile. But it also kept defying the predictions of practically everyone who claims to know anything about the economy by resuming the substantial fall it began since last April’s “Liberation Day” tariffs began being imposed.
Clashing just as loudly with the conventional wisdom: This major trade balance improvement has come even as growth has been strong – rather than because, as has been typical, a slowing or even shrinking economy has dampened demand for both domestically and foreign-produced goods and services.
In so doing, as with yesterday’s report on consumer inflation, the new trade release (which brings the story up through January) revealed that at least up till the time when the current Iran attacks and the Supreme Court’s decision striking down most of the Trump 2.0 tariffs, the president’s important experiment in economic policy making was proceeding well.
As for the volatility, here’s how the deficit has changed sequentially since last April:
May: Up 17.44 percent
June: Down 18.32 percent
July: Up 28.79 percent
August: Down 24.55 percent
September: Down 12.22 percent
October: Down 36.74 percent
November: Up 80.14 percent
December: Up 30.12 percent
January: Down 25.30 percent
Talk about a rollercoaster!
That latest January narrowing produced a combined goods and services trade deficit of $54.46 billion – very close to the low end of the range reported since Liberation Day. The only fly in the ointment: The December figure was revised up by a big 3.68 percent, from $70.31 billion to $72.90 billion.
As for the trade deficit reduction, since Liberation Day (and counting last April), it’s totaled $582.18 billion. During the last comparable period under the pre-tariff-y Biden administration, that number was $832.09 billion. In other words, it was thirty percent lower.
It’s true that the Biden figure includes the abnormally high numbers from December, 2024 and January, 2025 – when President Trump’s second election victory ignited a burst of importing in order to front-run the tariffs he promised during his campaign. But even before that period, the monthly 2024 Biden numbers were significantly higher than the 2025 Trump numbers.
The trade gap narrowed in January sequentially in part because total exports rose by 5.54 percent, and in part because total imports dipped by 0.72 percent. Exports’ increase brought their monthly level to $302.15 billion – a new record. The old mark of $301.18 billion was set last October. In addition, the monthly increase was the greatest since the 6.81 percent jump in October, 2021.
In other words, so much for widespread predictions that the Trump trade war would spark devastating foreign retaliation. And clear vindication for the administration’s belief that this failure reflects America’s superior leverage in trade diplomacy.
The goods trade deficit has been volatile, too, lately, and shrank by 17.59 percent on month in January, from a downwardly revised $99.25 billion to $81.79 billion. That level was the lowest …
(What’s Left of) Our Economy: The Final Pre-War and Pre-Supreme Court Trade Data Kept Confirming Trump’s Trade and Tariff Strategy
Ask who never gets charged.
Today’s official report on monthly U.S. trade flows continued two recent trends: The longstanding overall U.S. deficit remained very volatile. But it also kept defying the predictions of practically everyone who claims to know anything about the economy by resuming the substantial fall it began since last April’s “Liberation Day” tariffs began being imposed.
Clashing just as loudly with the conventional wisdom: This major trade balance improvement has come even as growth has been strong – rather than because, as has been typical, a slowing or even shrinking economy has dampened demand for both domestically and foreign-produced goods and services.
In so doing, as with yesterday’s report on consumer inflation, the new trade release (which brings the story up through January) revealed that at least up till the time when the current Iran attacks and the Supreme Court’s decision striking down most of the Trump 2.0 tariffs, the president’s important experiment in economic policy making was proceeding well.
As for the volatility, here’s how the deficit has changed sequentially since last April:
May: Up 17.44 percent
June: Down 18.32 percent
July: Up 28.79 percent
August: Down 24.55 percent
September: Down 12.22 percent
October: Down 36.74 percent
November: Up 80.14 percent
December: Up 30.12 percent
January: Down 25.30 percent
Talk about a rollercoaster!
That latest January narrowing produced a combined goods and services trade deficit of $54.46 billion – very close to the low end of the range reported since Liberation Day. The only fly in the ointment: The December figure was revised up by a big 3.68 percent, from $70.31 billion to $72.90 billion.
As for the trade deficit reduction, since Liberation Day (and counting last April), it’s totaled $582.18 billion. During the last comparable period under the pre-tariff-y Biden administration, that number was $832.09 billion. In other words, it was thirty percent lower.
It’s true that the Biden figure includes the abnormally high numbers from December, 2024 and January, 2025 – when President Trump’s second election victory ignited a burst of importing in order to front-run the tariffs he promised during his campaign. But even before that period, the monthly 2024 Biden numbers were significantly higher than the 2025 Trump numbers.
The trade gap narrowed in January sequentially in part because total exports rose by 5.54 percent, and in part because total imports dipped by 0.72 percent. Exports’ increase brought their monthly level to $302.15 billion – a new record. The old mark of $301.18 billion was set last October. In addition, the monthly increase was the greatest since the 6.81 percent jump in October, 2021.
In other words, so much for widespread predictions that the Trump trade war would spark devastating foreign retaliation. And clear vindication for the administration’s belief that this failure reflects America’s superior leverage in trade diplomacy.
The goods trade deficit has been volatile, too, lately, and shrank by 17.59 percent on month in January, from a downwardly revised $99.25 billion to $81.79 billion. That level was the lowest …
0 Comments
0 Shares
26 Views
0 Reviews
