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Trump Administration Tariffs Are Not Achieving Their Goals

• October 14, 2026
• Ed Gresser

FACT: Trump administration tariffs are not achieving their goals.

THE NUMBERS: U.S. monthly trade deficit (goods only)* – 

* Census Bureau, monthly “FT-900” trade releases

WHAT THEY MEAN:

Over the last 21 months, the Trump administration has published over 50 Executive Orders, Proclamations, and other tariff decrees. Courts have struck down some down; the administration has withdrawn, amplified, or rewritten others; yet more remain in court. But a lot are still in effect, in total raising U.S. tariff rates from a trade-weighted 2.5% average in 2024 to about 11% this month. 

What is the administration trying to achieve? And are they succeeding?

Setting aside slogans — “new golden age,” “reindustrialization,” “production society,” etc. — two specific admin. goals come from a House Ways and Means Committee hearing in April 2025, a week after the now-defunct “international emergency” decree. In the exchange at 2:32:09, later elaborated on in more formal speeches, U.S. Trade Representative Jamieson Greer defines them as follows: 

“The deficit [i.e., trade balance] needs to go in the right direction. Manufacturing as a share of GDP needs to go in the right direction.” 

As “metrics,” these have drawbacks. Analytically, trade policy isn’t the main influence on either. Trade balance — exports minus imports — is basically a “macro” phenomenon determined by savings and investment rates, and (to the extent government actions shape it) heavily influenced by shifts in tax policy. “Manufacturing as a share of GDP” over time isn’t “manufacturing growth,” but the ratio of manufacturing output to output in construction, information industry, finance and real estate, and ten other economic “sectors.” That is, the GDP share doesn’t really tell you whether manufacturers are objectively doing badly or well, just how the growth rates compare. (See below for some more detail.) And since both trade balance and GDP share are secondary indicators with multiple interpretations, rather than primary indicators such as price stability, job creation, and growth, Americans assessing policy will likely struggle to connect them to daily life, work, and family budgeting.

But all that said, trade balance and manufacturing/GDP ratios are better than slogans of the “new golden age type” because they are measurable things and U.S. government statisticians regularly report on them. How do they look after 21 months?

Balance: Assuming Amb. Greer’s preferred trade-balance direction was “down,” that hasn’t happened. Trade deficits have been volatile but mostly trending up. 

The balance the administration usually talks about is “goods only” — i.e., flows of manufacturing, agriculture, energy, mining, scrap, small-scale packages, and other physical goods. Over the Biden administration’s four years, this averaged -$93.6 billion a month. For April 2025, the month of the hearing, Census’ FT-900 trade data release reported a slightly lower -$86.6 billion, sharply down from the early 2025 spike to -$159 billion when businesses were stockpiling imports before tariffs hit. Monthly deficits continued to fall during the summer as these stockpiles dwindled, to a -$65.3 billion low last October. Since then they’ve been rising, topping -$100 billion last May and hitting -$136.6 billion in August. (The most recent month for which the Census has published data. This is 10% above the Biden era’s highest monthly deficit (-$124 billion in December 2024) and 50% above the Biden era’s monthly average. 

The broader goods-and-services measurement has followed a similar track with somewhat lower dollar figures. (U.S. services trade — entertainment, intellectual property revenues, R&D, financial services, professionals, etc. — is usually in surplus.) The most meaningful measurement, which accounts for inflation, is “relative to GDP.” Here, the Commerce Department’s Bureau of Economic Analysis puts the overall U.S. trade balance at -2.7% of GDP at the end of the Obama administration in 2016, -2.9% in 2020 after four years of elevated tariffs, -3.0% in 2024, and also -3.0% in 2025. Given the recent escalation, the figure will likely be about the same or a little higher this year.

Manufacturing/GDP: Here the direction is mostly “down.” According to the Commerce Department’s Bureau of Economic Analysis, in 2016 — the Obama administration’s final year — the manufacturing share of U.S. GDP was 10.8%. By 2024, after eight years of tariffs on metals and most Chinese goods, it was 9.8%, and the figure for 2025 was 9.5%. The most recent report (for the first half of 2026), though, shows a small upturn to 9.7% in the second. This seems to mostly reflect relative growth in U.S. petroleum refining given the spring’s higher gasoline and diesel prices, with the rest of manufacturing staying the same.

In sum, if the goals were lower trade deficits and higher manufacturing/GDP ratios, so far the opposite has been happening. As to the more relatable primary indicators — prices, hiring, job security, growth — and the impact tariffs have had on them, the public will get its say in three weeks. 

FURTHER READING: 

PPI’s four principles for response to tariffs and economic isolationism:

• Defend the Constitution and oppose rule by decree;
• Connect tariff policy to growth, work, prices and family budgets, and living standards;
• Stand by America’s neighbors and allies;
• Offer a positive alternative.

Data:

The Census has top-line goods trade figures for each month, plus full-year totals, since 1987.

… and the more detailed monthly reports.

BEA’s “GDP by Industry” database has total U.S. GDP, sector shares (agriculture, mining, retail, manufacturing, industry, health, information, finance, construction, transport, etc.), and trends over time since 1997.

Admin. view:

Amb. Greer explains as of mid-2025. The passages on trade balance and manufacturing GDP share are towards the end.

More detail:

1. Manufacturing share of GDP: This is not “how strong is the manufacturing sector”, but “the size of manufacturing relative to other economic ‘sectors,’” which in BEA accounting includes agriculture and mining, utilities, construction, wholesale trade, retail trade, transportation, information, finance and real estate, professional and business services, education and health, arts and entertainment, and government. This means that manufacturing’s share of the economy could fall during a factory boom if other large parts of the economy — say homebuilding, the digital economy, retail sales — grew even faster. That is exactly what happened in the late 1990s. Likewise, the “manufacturing share of GDP” could rise despite lots of factory closures and job loss if housing and banks crashed even harder. This hasn’t happened recently, but 2009 and 2010 were pretty close. So, an interesting and useful line of data, but one to use carefully.
2. Trade balance: Trade balance is “exports minus imports.” By economic math, the national trade balance equals the gap between national savings and national investment rates. Changes in these “macro” figures change the balance, and trade policy in the sense of agreements, rules, and tariff rates typically has little impact on it.  The government’s largest influence on these figures is the fiscal deficit, which is part of the national savings rate. Fiscal deficits typically rise after large tax-cut bills — as in the early 1980s, the early 2000s, and the first Trump administration — and trade deficits typically follow them up.

Household savings and business investment, though, are even stronger influences.  Trade deficits tend to rise in boom years as investment rises and families spend, and fall in recessions as investment crashes and consumers pull back.  For example, in 2009 — this century’s worst year for the U.S. economy generally, for job loss, and for manufacturing specifically — the U.S. trade deficit fell by almost half, from $712 billion to $395 billion or from 5.0% to 2.9% of GDP.  No one cheered.

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