Trump is losing the trade war, according to his favorite measure
- President Donald Trump has made the reduction of the US trade deficit one of the key measures of success in his trade fights with China, the European Union, and Canada.
- According to new data, the US trade deficit is growing, despite Trump's tariffs.
- The deficits between the US and Trump's main trade adversaries are also growing.
President Donald Trump is losing his trade wars - at least according to his own measure of success.
The president repeatedly mentions the US trade deficit when talking about trade fights with China, the European Union, and Canada. In negotiations with China, Trump's major request was for a massive reduction in the bilateral trade deficit.
But based on the most recent trade numbers released Friday, it appears Trump is falling short in his main goal for trade battles: The US trade deficit is actually heading in the opposite direction.
The US trade deficit increased in the month of June, according to the US Census Bureau, to $46.3 billion from $43.2 billion in May. Additionally, the trade deficit for 2018 continues to outpace the shortfall in 2017.
"Year-to-date, the goods and services deficit increased $19.6 billion, or 7.2%, from the same period in 2017," the Census Bureau said in a press release.
Many economists say Trump's focus on trade deficits is misguided and that large trade deficits simply show increased domestic demand. In fact, some economists argue a larger trade deficit actually displays signs of a stronger US economy.
But the data could serve to further escalate Trump's desire for a more aggressive trade policy:
- Canada's global trade deficit, for instance, shrank to just $481 million in June, down from $2.08 billion the month before, according to Statistics Canada. The decrease came on the back of strong export growth, which was up 4.7% from the month before.
- According to the US Census Bureau, the US goods deficit with Canada jumped to just over $2 million in June from $1.4 million in May.
- The goods trade deficit with the EU did shrink in June, down to $11.7 million from $13.4 million the month before.
- But the deficit over the first six months of 2018 increased compared to 2017, to $77.6 million from $69.9 million.
Trump other major trade adversary, China, also appears to be winning the trade fight based on the president's metrics:
- The goods trade deficit with China increased in June to just under $300 million compared to the month before - and by almost $1 billion from June 2017.
- Through the first six months of 2018, the goods trade deficit with China hit $185.7 billion, compared to $171.1 billion in the first six months of 2017.