Trump tariffs leads to marginal lower deficit on balance of trade, but huge loss on international investment in US
| Aspect | What’s happened under Trump’s politicised tariffs (2025–26) | Net economic effect so far |
|---|---|---|
| Trade balance | Goods & services deficit has fallen from unusually high 2024–25 levels, but is still large and only modestly improved. | Slight short‑run narrowing, not a clear structural “fix” to imbalance. |
| Tariff incidence | 80–90% of tariff costs are paid by U.S. importers/consumers, not foreign exporters. | Domestic households and firms bear most of the burden. |
| Capital flows & risk premium | Markets initially marked U.S. assets as riskier: stocks, bonds, and the dollar fell; scenarios with persistent higher risk show capital flowing away from the U.S. | If risk premium stays elevated, international capital migrates out of the U.S., not in. |
| Growth & wages | Long‑run modelling projects ~6% lower GDP and ~5% lower wages versus baseline. | Tariffs act as a heavy drag on growth and income. |
| China decoupling | Tariffs have clearly reduced China’s share of U.S. imports and raised customs revenue. | Effective for decoupling and revenue, not clearly for overall trade balance. |
Comments
Trumps Tariffs MISTAKE, will cost US GDP, $1.2 Trillion in lost national wealth HE MUST MAKE UP with invading Canada, or face electoral wipeout.
"Tariffs act as a heavy drag on growth and income."
"Long‑run modelling projects ~6% lower GDP and ~5% lower wages versus baseline."