Donald Trump won key midwestern states and the presidency in 2016 in no small part because of his focus on trade reforms and promise to “speedily reduce the deficit.” But as he lost many of those states in the 2020 election during the third quarter of Trump’s fourth year in office, the trade deficit is 26.4% higher than in the same period in President Barack Obama’s last year. This despite a 14.6% overall fall-off in trade flows compared to 2019 related to the COVID-19 pandemic. The question now is whether President-elect Joe Biden will take bold action on trade policy and deliver more balanced trade flows and boost domestic manufacturing. Working people have had it with the failed agenda of corporate-led hyperglobalization that has resulted in millions of good American offshored, downward pressure on wages and America so weakened it cannot produce the basic goods it needs to battle the COVID-19 crisis.
U.S. Census Bureau trade data shows that:
- In inflation-adjusted terms, the $489.5 billion trade deficit in the first nine months of 2020 is more than 26% higher than the $387 billion deficit during the same period in 2016, before President Donald Trump entered office promising to eliminate the deficit entirely. The current figure is also 7.2% higher compared to the same months in 2019 ($456.4 in inflation-adjusted dollars).
- The 9-month trade deficit in goods decreased in 2020 from $675.5 billion in 2019 (inflation-adjusted) to $661.6 billion in 2020, a 2% reduction. However, the 2020 9-month deficit in goods is up 11.4% compared to 2016’s figure ($593.9 in inflation-adjusted dollars).
- The manufactured goods trade for the first nine months of 2020 is 13.6% higher than in 2016 (from $695.5 billion to $790 billion in inflation-adjusted dollars).
- The China trade in goods deficit is down relative to Obama’s final year, but there is a “trade diversion” effect of imports increasing from other countries.
- The 2020 nine-month trade in goods deficit with China of $224.5 billion is 19.7% smaller compared to 2016, before Trump entered office, when it was $279.7 billion in inflation-adjusted dollars for the January to September period. The China deficit is down more than 16% in inflation-adjusted terms from 2019, when it was $268.1 billion in the first three quarters of the year.
- In inflation-adjusted dollars, the goods trade deficit with the rest of the world (excluding China) increased from $407.4 billion to $437 billion in the first nine months of 2020 relative to the same period in 2019, a 7.3% rise.
*Data Note: Trade data is sourced from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis. We present deficit figures adjusted for inflation to the base month of September 2020 and expressed the data in constant dollars, so the figures represent actual changes in the trade balances.