ECONOMY
Trump tariffs are trying to reduce U.S. trade deficit
March 5, 2025 - The U.S. trade deficit grew in recent years, largely due to a strong dollar which allowed U.S. to buy more foreign goods, while struggling foreign trade partners were unable to reciprocate.
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One of President Donald Trump’s most urgent priorities is to put an end to the U.S. trade deficit – the excess expenditure on imported foreign goods compared to income generated from exports.
In a joint session of Congress on Tuesday, in which he declared “the American dream is unstoppable”, Trump admitted Americans could be in for a bumpy ride ahead after he slapped high tariffs on goods imported from Canada, Mexico and China.
The Trump administration believes that by hitting countries with punitive tariffs on their exports to the U.S., it will pressure nations to buy more American goods.
However, reality could be somewhat different to his vision, with the U.S. risking becoming seen as an unreliable trading parter.
Canada is already decoupling its oil business from the U.S. and the EU has struck a huge new trading partnership with four South American countries that excludes the United States.
Add to this retaliatory tariffs on U.S. exports from the countries he has targeted and Trump’s task starts to look unrealistic, with Americans likely to see the price of goods go up.