$130 Billion Monthly Goods Trade Deficit Tops Level of Two Years Ago: IW Report Says Tariffs Failed to Shrink the U.S. Deficit, EU Share Down to 7% and China's to 14%
President Donald Trump's economic agenda has delivered robust growth and strong investment but failed to reduce the U.S. trade deficit, according to a study by the German Economic Institute IW seen by Reuters on Friday, October 30.
The report found mixed results from Trump's tax cuts, tariffs and drive to revive domestic manufacturing: gross domestic product growth remained solid and investment related to super intelligence was buoyant, but job creation lagged the prior administration and inflation remained above the Federal Reserve's 2 percent target.
On trade, the U.S. goods trade deficit reached $130 billion in August, exceeding its level two years earlier, despite sweeping import tariffs.
Trade patterns had shifted, however. The European Union's share of the deficit fell to 7 percent from 20 percent in August 2024, while China's share declined to 14 percent from 29 percent.
Efforts to bring manufacturing back have so far fallen short. Foreign direct investment inflows fell 8.2 percent to $248 billion in 2025, 18 percent below the 2015-2024 average.
The report also said the U.S.-Israeli war against Iran is increasing already high public debt and pushing up interest rates, with creditors questioning whether the United States can sustain its outstanding debt of $40 trillion.
Source: Reuters, October 30 (IW report)
Source: GSM · USA (original Chinese edition)
Photo: 图：美国 Texas 州 Houston 附近的 Bayport 集装箱码头航拍（资料图）。照片：formulanone，CC BY-SA 2.0，经 Wikimedia Commons。 / An aerial view of the Bayport Container Terminal near Houston, Texas (file photo). Photo: formulanone, CC BY-SA 2.0, via Wikimedia Commons.
