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The US trade deficit fell by close to 60% in the first year of President Trump’s second term, providing dramatic evidence of the effects of his signature economic policies, including tariffs.
Breitbart reports, “The Commerce Department said Thursday that the goods and services deficit fell to $54.5 billion in January, down from $128.4 billion in the same month a year ago. That marked a decline of $73.9 billion, or 57.6 percent.
“Exports rose to $302.1 billion in January, up $28.4 billion, or 10.4 percent, from a year earlier. Imports fell to $356.6 billion, down $45.5 billion, or 11.3 percent.
“The improvement was especially striking in goods trade, where the deficit fell to $81.8 billion from $155.6 billion a year earlier. Goods exports climbed to $195.5 billion from $173.4 billion, while goods imports dropped to $277.3 billion from $329.0 billion.”
Critics had warned President Trump’s tariff policy would raise costs without reducing the deficit.
January’s gain in exports was led by industrial supplies and materials, and capital goods like computers and aircraft.
With regard to specific trading partners, the US deficit with the European Union narrowed to $6.1 billion in January from $11.1 billion in December.
The deficit with Mexico shrank by just over $2.5 billion, and by almost $4 billion in the case of Canada.
As Breitbart notes, “The January report may take on added significance because it captures trade flows before later disruptions from the Supreme Court’s decision striking down many Trump tariffs and before the outbreak of war in Iran at the end of February. That leaves it as one of the last clean snapshots of the trade balance after a year of Trump’s policies but before those new shocks began to reshape global commerce.”
