Trump Attributes 78 Percent Trade Deficit Drop to Tariffs

(MENAFN) President Donald Trump declared late Wednesday that sweeping tariffs imposed by his administration have slashed the United States trade deficit by 78%, a claim that arrives amid a turbulent — and still-unfolding — economic picture.

"THE UNITED STATES TRADE DEFICIT HAS BEEN REDUCED BY 78% BECAUSE OF THE TARIFFS BEING CHARGED TO OTHER COMPANIES AND COUNTRIES," Trump wrote on his Truth Social platform.

He further predicted that the deficit will "go into positive territory" in 2026 for the first time "in many decades."

The remarks land ahead of the Thursday release of December trade figures, which government projections suggest could show a $55.50 billion monthly surplus — what would be the first positive monthly trade balance since 1975.

The data, at least in part, lends some weight to Trump's position. The US goods and services trade deficit contracted sharply from a record $140.5 billion in March 2025 to $27.62 billion in October — a roughly 80% drop — according to government statistics. November, however, saw the deficit rebound to $56.82 billion, complicating the narrative.

The broader annual figure tells an even more nuanced story. Despite the recent compression, the US is still projected to post a trade deficit surpassing $800 billion for 2025 — a significant improvement from a record $1.2 trillion in 2024, but hardly a clean win. Economists point to a surge in first-quarter imports as businesses rushed to stockpile inventory ahead of Trump's sweeping "liberation day" tariffs, introduced in April, as a primary driver of that year-opening shortfall.

Throughout his second term, Trump has dramatically escalated tariffs against multiple trading partners, with China, Canada, and Mexico bearing the heaviest burden. The administration has deployed the measures both as a tool to revive domestic manufacturing and as diplomatic leverage — with mixed results. Global markets have been rattled, economic uncertainty has deepened, and relations with key allies including Canada and the European Union have grown increasingly strained.

On the revenue side, the tariff push has generated a windfall for the federal government. According to US Treasury data, fiscal year-to-date tariff revenues reached $124 billion as of January — a striking 304% increase compared to the same period in 2025.

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