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Trump Ups War Against Trade Deficit
By Prathapan - Feb 20, 2025, 07:58 AM ET
America’s trade gap has risen to $918.4 billion with China and EU at the top enjoying the highest positive trade balance
Ever since Donald Trump returned to the White House as president for a second term, America’s international trade deficit or trade imbalance has been in the news. A trade deficit occurs when the balance of payment, which is the difference between the value of a country’s imports and the value of its exports, turns negative. The US closed 2024 with a deficit in international trade in goods and services of $918.4 billion, up $133.5 billion from the previous year’s $784.9 billion, according to the Bureau of Economic Analysis.
The country’s growing trade deficit was a major campaign point for Trump against Vice President Kamala Harris. The Joe Biden administration (2021-2024) had seen the deficit grow to $918.4 billion in 2024 from $784.9 billion in 2023. The deficit was $653.7 billion by 2020 end.
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Countries with positive trade balance
Trump has called out all major markets with whom America has enormous deficits and has threatened to intervene with a tariff regime to remedy the situation.
On the long list of countries with substantial trade ties with the U.S., President Trump has reason to love only a few in terms of a positive balance of payment. The U.S. had the best balance of trade numbers in 2024 against the Netherlands at $55.5 billion. The European country is followed by Hong Kong which has $21.9 billion negative trade balance against the U.S. and Australia with $17.9 billion. Trade balance favors the U.S. in its trade with the trans-Atlantic ally United Kingdom at $1.19 billion. The others include Brazil ($7.4 billion), Belgium ($6.3 billion) and Singapore ($$2.8 billion). As of 2024, the U.S. has a slender $400 million positive trade balance with Saudi Arabia also.
China leads in negative trade balance
Trump has threatened to unleash a tariff war against the countries with a huge trade deficit with the U.S., with traditional rival China by exporting goods and services worth $295.4 billion more than its imports from the U.S. European Union is the other pain point for the country’s international trade to whom the U.S. yielded $235.6 billion trade gap. Americans built up a negative trade balance of $171.8 billion with the neighbor to the south, Mexico, with whom Trump has a running row over illegal immigrants and the border wall. Vietnam ($123.5 billion), Ireland ($86.7 billion), and Germany ($84.8 billion) also would be reckoned as badly hurting the U.S. economy. The top “balance of payment abusers” could include Taiwan ($73.9 billion), Japan ($68.5 billion), South Korea ($66 billion), Canda ($63.3 billion), India ($45.7 billion), Italy ($44 billion) and Switzerland ($38.5 billion).
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