The Trade Deficit Is Up, But It’s Not Donald Trump’s Fault

Kevin Drum

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.

The New York Times reports on the trade deficit:

The U.S. trade deficit in goods and services continued to climb in August, growing 5.9 percent from the previous month to $67.1 billion, the highest monthly level since 2006, as American imports outpaced exports….The rising trade deficit comes at an inconvenient moment for the Trump administration, which is eager to declare victory on its trade agenda as the election approaches. Economists caution against using the trade deficit as a measure of the economy’s health, but President Trump views the figure as a measure of his success in rewriting trade deals in the United States’ favor.

Poor Donald. But just this once, I’ll defend him. The trade deficit, by definition, is equal to government savings plus personal savings. Because of the pandemic, the federal government is running a big deficit, so government savings are negative. Likewise, thanks to high unemployment, households have been eating into their savings since April, which means that personal savings aren’t rising to make up for this. This makes it inevitable that the trade deficit is going to increase.

So it’s not really Trump’s fault. Like nearly every economic indicator these days, the trade deficit has to be taken with a grain of salt thanks to government shutdowns caused by the COVID-19 pandemic.

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. It's our first time asking for an outpouring of support since screams of FAKE NEWS and so much of what Trump stood for made everything we do so visceral. Like most newsrooms, we face incredibly hard budget realities, and it's unnerving needing to raise big money when traffic is down.

So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate