On US Trade Deficit, Debt, And Illegal Immigration, Trump Precipitously Failing
In the 2016 election, Trump positioned himself as the master deal maker that would provide an instant fix to three key issues: the US trade deficit, national debt, and illegal immigration. Two plus years into his presidency, Trump has not only failed to make any headway on these issues, they have collectively gotten far worse during his tenure as President.
Despite Trump’s trade war with China, the US trade deficit has hit an all time historical high. The Commerce Department said Wednesday that the United States last year posted an $891.2 billion trade deficit in merchandise, the largest in the nation’s 243-year history despite more than two years of President Trump’s “America First” policies. Tariffs became a key part of Trump’s strategy for reducing the trade deficit, the difference between the country’s high import expenditures and its lower export sales. He used the import taxes on solar panels, washing machines, steel, aluminum and other various Chinese goods to force China and other countries into negotiations, with the aim of reestablishing trade balance.
Unfortunately, Trump cannot escape the laws of economics and to date, his trade war has backfired. The tariffs have served to depress the Chinese economy and reduce their purchasing power for US goods. Particularly hard hit are US farmers who have had to rely on tax payer funded federal relief as the result of tariff driven shortfalls in soybean exports to China. The net effect is the polar opposite of Trump’s promise and intention to reduce the trade deficit having succeeded only in making it far worse.
Trump’s cutting of tax revenues for the wealthiest Americans and corporations while lifting any caps on government spending have led to a record US national debt. The Treasury Department released a report Tuesday evening confirming that the national debt had hit a record $22 trillion, nearly four years after then-candidate Donald Trump promised his supporters he would reduce the national debt from $18 trillion if elected president. At his official campaign launch in 2015, Trump told his supporters that he would apply his business acumen to US government fiscal policy saying he would reduce our $18 trillion while warning that we were in a dangerous bubble.
Again the polar opposite has occurred with the US national debt having increased by $2.065 trillion since Trump took office. More troubling, there does not appear to be any sort of Trump administration plan to reduce the debt with the last budget proposal it released instead projected to add $7.2 trillion more to the debt over the next 10 years.
On Trump’s hallmark platform, reducing illegal immigration, whereas the Obama administration made significant progress in reducing illegal border crossings, the Trump administration is seeing a 12 year high in illegal border crossings. Border patrol encountered more than 76,000 people they say tried to illegally cross from Mexico into the U.S. in February, making it the highest level of illegal immigration the U.S. has seen in one month since 2007. Draconian measures the Trump administration has taken to reduce illegal border crossings – separation of children from parents detained at the border and ordering the US military to deter migrant caravans seeking asylum – seemed to have instead reignited the resolve of Central Americans to illegally cross the border (likely because of the harsh consequences in trying to do it legally claiming asylum).
Taken in the context of Trump’s recent failure to reach a nuclear deal with North Korea in Hanoi, for a President who authored “The Art of the Deal” and ran his campaign on winning so much that his constituents would tire of winning; there is little winning to be celebrated at this point in the Trump presidency.