Two new pieces of economic data, one released Thursday and one released Friday, blew another hole in President Donald Trump’s triumphant narrative about the effects of his tariffs.
The figures released early Thursday showed Trump had wildly overstated the impact of the tariffs on the trade deficit. The figures released early Friday showed he also had wildly exaggerated economic growth in the fourth quarter of 2025.
The Supreme Court struck down many of Trump’s tariffs later on Friday. But other tariffs remain in place, and Trump quickly said he plans to replace the ones the court declared illegal with new tariffs under a different law.
The trade deficit was down 0.2% in 2025, not down ‘78%’
Trump has for years highlighted the trade deficit – the difference between the value of US imports and exports – as a supposed example of how the US is being “ripped off” by other countries. (Many economists disagree with his characterization.) On Wednesday evening, he posted a celebratory message on social media.
The next morning, though, the Bureau of Economic Analysis revealed the actual 2025 trade deficit in goods and services. It was nearly identical to the 2024 deficit, down just 0.2% — nowhere close to Trump’s professed “78%” decline. And the trade deficit in goods, the items subject to Trump’s sweeping global tariffs, was up 2.1% compared to 2024.
Trump didn’t make up the “78%” figure out of thin air, but it was still deceptive. He was citing an out-of-date and short-term number from October 2025, when the trade deficit was 78% lower than it was in January 2025. Experts cautioned at the time that the sharp October drop would be fleeting, the result of temporary fluctuations in gold and pharmaceuticals trade, and it was.
Trump’s Wednesday post was also inaccurate in suggesting his tariffs are paid by foreign countries. Tariff payments are made by US importers, not foreign exporters, and those importers often pass on some of their costs to consumers. While foreign exporters may sometimes drop their prices to try to keep their products competitive, various analyses have found that the overwhelming majority of the costs of the tariffs Trump has imposed this term are being covered by a combination of US businesses and US consumers.
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