In May, the U.S. goods and services trade deficit widened sharply to $77.6 billion. This represents a staggering 42.2% jump in just a single month. To put that in perspective, the trade gap is now significantly higher than the $70.1 billion monthly average seen during the Biden administration.
But this is not alarming unless you were listening to the Trump administration’s explanation for why we needed to start a global trade war. America has a trade deficit because our country is so prosperous that we can afford to purchase more goods from the world than we sell to it. A trade deficit in and of itself is not necessarily bad; for instance, many of the globe’s poorest nations do not have trade deficits because their citizens cannot afford to purchase many goods. However, the promise of the protectionists in the second Trump administration was that their extraordinary tariff campaign would eliminate the trade deficit and bring back American jobs. It’s done neither.
