President Donald Trump said that he hopes to erase the U.S. trade deficit with other countries—but anyone who understands economics knows that wouldn’t be a good thing.
“I spoke to a lot of leaders—European, Asian—from all over the world. They are dying to make a deal, but I said, ‘We’re not gonna have deficits with your country,’” Trump told reporters on board Air Force One Sunday. “We’re not gonna do that, because to me a deficit is a loss. We’re gonna have surpluses or at worst we’re gonna be breaking even.”
A trade deficit isn’t a “loss,” regardless of what Trump thinks. A trade deficit simply means that one country spends more on goods from another country than that country spends on goods from them.
Crucially, economists say that having a trade deficit is not an inherently bad thing at all, because the U.S. simply can’t and shouldn’t make everything. Trump’s insistence that the U.S. is being taken for a ride betrayed a fundamental misunderstanding of economics that is built off of a dislike of other countries and a desire to be the dealmaker responsible for a new world order.
Trump warned that it would be the “worst” for China. In 2024, the U.S. had a $295.4 billion trade deficit with China. Trump said that China would need to “solve their surplus” before he would be willing to make a deal on tariffs.
The president predicted that his “reciprocal tariffs” would raise $1 trillion in the next year, and that “thousands” of companies would relocate manufacturing to the United States.
China announced Friday that it would impose 34 percent tariffs on imports from the U.S. in response to Trump’s new “reciprocal” 34 percent tariff, which was added on top of two rounds of 10 percent tariffs that had been announced last month.
Trump’s announcement of “reciprocal tariffs” last week sent the U.S. stock market plummeting to its worst day since 2020, and major financial institutions updated their recession projections for 2025. But Trump merely compared the financial chaos to a sick patient taking their “medicine.”
Trump was widely mocked for his ridiculous plan to eliminate the trade deficit.
Tahra Jirari, director of economic analysis at the Chamber of Progress, wrote on X Sunday that “a trade deficit isn’t a ‘loss,’ it just means we import more than we export. Countries run trade deficits for all kinds of healthy reasons (like strong consumer demand). ‘Breaking even’ isn’t how global trade works.”
Zeteo News’s editor-in-chief Mehdi Hasan wrote on X Sunday that Trump was “an ignoramus the like of which we have not seen in our lifetimes. Wharton must be so embarrassed.”
Jonah Goldberg, editor-in-chief of The Dispatch, wrote in a post on X Monday that “Trumpers slavishly defend one man unilaterally screwing up the economy and the America-led global order because he’s some kind of genius. And it turns out—as was apparent for decades—he just doesn’t know what he’s talking about.”
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