Former President Donald Trump continues to be fixated on the trade deficit of the United States and the health of the U.S. manufacturing sector. When he was president, one of Trump’s policy initiatives was to reduce the trade deficit by raising tariffs. Trump also said that tariffs would help protect employment in the manufacturing sector from unfair foreign competition. He failed on both counts. During Trump’s presidency, the trade deficit increased to its highest level in a decade. The manufacturing sector also continued to lose jobs but not because of imports.

For decades, U.S. manufacturing, as a percentage of gross domestic product, has been stable at around 12%. However, employment has declined because manufacturing productivity has increased. Manufacturers now produce more per unit of labor. U.S. manufacturers are globally competitive. They don’t need tariffs to compete. Nonetheless, the Trump campaign continues to make the false claim that tariffs will reduce the trade deficit and help stabilize the fiscal deficit.