Donald Trump won key midwestern states and the presidency in no small part because of his focus on trade reforms and promise to “speedily reduce the deficit.” But the U.S. global trade deficit has steadily increased during the two and one-half years of the Trump administration for which there is complete data. The most recent data, covering January – September 2019, reveals the highest goods trade deficit with NAFTA countries for the first three quarters of a year since the 2008-09 financial crisis. The U.S. goods trade deficit with the world remains high, only 1 percent lower than the same period last year. The United States suffered the highest-ever U.S. trade-in-goods deficit with China during the first two years of the Trump administration, as the China deficit grew each year. However, the U.S. deficit with China in the first three quarters of 2019 is considerably reduced relative to the same period last year.
- The U.S. goods trade deficit with the world for the first three quarters of 2019 is $653 billion, dropping 1 percent lower than the $661 billion deficit for the same period in 2018, although an increase relative to the last year of the Obama administration. The annual 2018 U.S. goods trade deficit with the world of $892 billion was larger than any year since the 2008-09 financial crisis – up 8 percent ($63 billion) over 2017 and up 14 percent ($108 billion) in 2018 over 2016, the last year of the Obama administration.
- The U.S. goods trade deficit with NAFTA partners Mexico and Canada continued to expand in the first three quarters of 2019 – up 14 percent (from $155 billion to $177 billion) relative to the first three quarters of 2018. This continues a trend of growing U.S. deficits with NAFTA partners: the 2018 annual U.S. goods deficit was up 16 percent relative to 2017, an increase from $181 billion to $210 billion, and up 30 percent ($49 billion) in 2018 relative to the U.S. annual NAFTA goods deficit in 2016, Obama’s last year.
- The U.S. goods trade deficit with China in 2018 was the largest ever recorded at $428 billion, up from $392 billion in 2017. This compares to $370 billion in 2016, President Obama’s last year. However, the goods trade deficit with China in the first three quarters of 2019 was $265 billion, which was down 14 percent relative to the $309 billion deficit for the same period in 2018.
These figures are adjusted for inflation to the base month of September 2019. Thus, the figures represent changes in trade balances expressed in constant dollars, so, for years prior to 2019, the numbers are different than the data unadjusted for inflation that is provided by the U.S. Census Bureau.