Trump Said Tariffs Would Reduce the Trade Deficit. Instead, It Grew.

During former President Donald Trump's term in office, he promised that higher tariffs on American imports would reduce the country's large trade deficit.

At the time, many economists disputed that notion. Tariffs might marginally reduce the import side of the trade ledger, but they also reduce economic output (and therefore exports), so the net effect on the trade deficit was likely to be minuscule, they warned.

No matter. In 2017, the White House's official Trade Policy Agenda highlighted how America's manufacturing trade deficit had grown from $317 billion in 2000 to $648 billion in 2016. That was evidence, the document claimed, that greater levels of trade had triggered "a period of slowed GDP growth, weak employment growth, and sharp net loss of manufacturing employment in the United States."

You know what happened next. Tariffs were raised. Then more tariffs were added. President Joe Biden took over and left Trump's higher tariffs in place. American businesses and consumers paid the cost of those higher taxes. The average tariff rate on imports to the United States has climbed from 1.5 percent to over 3 percent, and annual tariff revenue has nearly tripled.