Trade Deficit and Tariff Policy

What is the position of the U.S. on International Trade ?

The subject of Tariffs is a complex situation if you examine country by country. 

There is no question that America is getting the Short End of the Stick.

Let’s gain some Perspective from History:

In 1800, Exports were about 10% of the U.S. Economy (GDP).

In 1900, Exports were about 7.5% of the Economy.

By 2000, the U.S. had flipped to a Trade Deficit:

• Exports: Approximately $781 billion in goods and services.

• Imports: Approximately $1.258 trillion in goods and services.

This resulted in a Trade Deficit of about $477 billion for 2000. (About -5% of GDP)

In 2023, the Trade Deficit was $779.8 billion.

Compare this to U.S. Domestic GDP of $27,360 billion  ($ 27.4 Trillion).

So, the Trade Imbalance equaled (2.8%) of GDP.

How would elimination of the Trade Deficit impact the U.S. economy :

An increase in GDP of 2.8% would mean:

O   $ 766 Million added to GDP.

O   Increase Employment by 3 Million Jobs.

O   Increase Tax Revenue to the U.S. Government by $113 billion.

This added Tax Revenue would reduce the annual Federal Deficit by 10%.

That is a major step towards a Balanced Federal Budget.  It is one part of the Plan.

The bigger bonus is prosperity for American workers with more job opportunities.

SUMMARY:

Trump has taken on the Unfairness in the Balance of International Trade.

The U.S. is showing strength instead of weakness.

This upsets the Status Quo with many countries.  It is long past due.

David Hollaender                                                February 27, 2025

Cogport.com