Day 776: The trade deficit has soared 24 percent since Trump took office

Donald Trump didn’t offer many actual promises on the campaign trail, outside of a wall that Mexico would pay for and locking up Hillary Clinton. He did, however, mention before and after the election that he would shrink the trade deficit.

Last year, it hit a nine-year high.

This year, it hit a 10-year high.

The U.S. trade deficit soared to a 10-year high in 2018 on the heels of a strong economy, despite President Trump’s ongoing efforts to bring it down through tariffs on imported goods.

For 2018 as a whole, the deficit grew to $621 billion — the highest since 2008, the Commerce Department said Wednesday. When the service sector is excluded, the gap was even greater, rising to a record $891.3 billion.

The overall trade deficit has grown by $119 billion in the two years since Trump took office.

From $502 billion in 2016 to $621 billion in 2018 is a whopping 23.7 percent jump in just two years.

Trump has fundamental misunderstandings about most things trade, including tariffs, deficits and the mechanisms for each. A higher trade deficit typically indicates a stronger economy, since market conditions make it more advantageous to import something than create it. Tariffs, in theory, artificially deflate imports to the U.S., driving down a trade deficit as the U.S. creates more goods. However, reciprocal tariffs create trade wars where neither side benefits and only cause costs to go up for everyone (which are typically passed on to the end-buyer).

To put in perspective how lost Trump is on the subject, a year ago, he bragged about how China would be asked to reduce their deficit with the U.S. by $1 billion (of a then-$372 billion deficit), as if that would give him some big win. Rather than touting sound economic principles and spinning a broken campaign promise as a win, Trump is probably going to yell at his trade czars to cut trade with Bulgaria by $10 million.

776 days in, 686 to go

Follow us on Twitter at @TrumpTimer