what was said
“We lost $817 billion a year, over the last number of years in trade. In other words, if we didn’t trade, we’d save a hell of a lot of money.”
— President Trump, speaking in Granite City, Ill., on Thursday
the facts
This is misleading.
Mr. Trump is exaggerating the United States’ trade deficit with the rest of the world, and grossly mischaracterizing what a trade deficit represents.
Over all, the United States ran a trade deficit in goods of $807 billion in 2017 and a trade surplus in services of $255 billion, for a net trade deficit of $552 billion. Over the past decade, the United States had a goods deficit of $724 billion and a net deficit of $518 billion — below Mr. Trump’s $817 billion figure.
What does this mean? Simply put, a trade deficit occurs when a country imports more goods and services than it exports to another. (It is also driven by a number of other economic factors like the growth rates of countries, the strength of their currencies and their savings and investment rates.)
The United States’ $552 billion trade deficit does not mean it has lost its wealth to other countries — a notion that “defies the most basic of economics,” said Scott Lincicome, a trade expert at the libertarian Cato Institute.
