Trump tariffs narrow US trade deficit to five-year low: White House

Washington: The US trade deficit narrowed to its smallest level since mid-2020, shrinking by more than 35 per cent from a year earlier, according to a White House press release that credited President Donald Trump’s tariff-driven trade strategy with delivering measurable gains for the American economy.

The administration said the latest data showed a sharp improvement in trade performance, pointing to stronger exports, reduced imports, and a marked contraction in the trade gap with China. It described the figures as further evidence that the President’s “America First” trade agenda is producing results after years of policies that, in its view, disadvantaged US producers.

US exports rose 6 per cent from a year earlier, reaching their second-highest value on record, the release said. Inflation-adjusted exports of consumer goods were described as the largest ever, underscoring what the administration portrayed as growing global demand for American-made products.

At the same time, the seasonally adjusted US trade deficit with China narrowed to its second-smallest level since 2009. The administration has made rebalancing trade with China a central pillar of its economic strategy, using tariffs as leverage to press for changes in market access and trade practices.

The data also showed a positive contribution to overall economic growth. In the third quarter of 2025, real exports grew at an annual rate of 4.1 per cent, while imports fell by around 5 per cent, adding about one percentage point to real gross domestic product growth, according to the release.

The White House said November’s trade deficit was cut by more than half compared to the same month last year, attributing the sharp improvement to a surge in tariff revenues. It argued that the combination of higher exports, lower imports, and increased tariff collections was helping to level the playing field for American workers, farmers, and manufacturers.

The administration framed the latest figures as a reversal of what it described as decades of weak trade policies that allowed foreign countries to flood US markets with goods while restricting access for American producers. It said President Trump had delivered better terms for domestic industries by using tariffs to compel trading partners to negotiate.

Since announcing what it called a historic trade agenda in April, the President’s use of tariffs has given the United States unprecedented leverage to secure new and improved trade deals, the release said. These agreements cover more than half of global GDP and include major partners such as the United Kingdom, the European Union, Japan, China, and the Republic of Korea.

The list of countries cited also includes Indonesia, Malaysia, Thailand, Vietnam, the Philippines, Cambodia, El Salvador, Ecuador, Argentina, Guatemala, Switzerland, and Liechtenstein, reflecting the administration’s claim that its trade strategy has had a broad global reach across both advanced and emerging economies.

Beyond trade balances, the White House linked the tariff strategy to a wave of domestic investment. As the President pursues what the release described as a bold America First trade agenda, scores of companies have announced trillions of dollars in new investment as they onshore workers from foreign countries and create tens of thousands of new American jobs.

The administration said these investment commitments are positioning the United States as the dominant player for the jobs of the future, reinforcing its argument that trade policy can be a central tool of industrial and employment strategy.

The US trade deficit measures the gap between the value of goods and services the country imports and those it exports. A narrowing deficit can result from stronger exports, weaker imports, or a combination of both, and is often closely watched by policymakers as an indicator of trade competitiveness.

Tariffs have long been a contentious instrument in US trade policy, praised by supporters as leverage to protect domestic industries and criticized by opponents for raising costs and risking retaliation. Under President Trump, tariffs have been used more aggressively as a core element of trade negotiations with major partners, reshaping the US approach to global commerce in his second term.

IANS