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

Kevin Drum

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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.

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is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

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