If President Donald Trump understood the balance of trade issue better, he’d be bragging about the rising trade deficit, because it’s correlated with a strong and growing economy. But he doesn’t, which creates the Trump Conundrum.
The U.S. usually has a trade deficit in goods but a trade surplus in services. For 2017, the trade deficit in goods was $810 billion, while the trade surplus in services was $244 billion, resulting in a goods and services deficit of $566 billion—the largest trade deficit since 2008.
Look at the accompanying graph from the U.S. Bureau of Economic Analysis. It depicts the U.S. international goods and services trade deficit.
As the graph shows, the goods and services trade deficit had been hovering around $40 billion to $45 billion per month, reflecting Obama’s slow-growth economy.
However, about the time of the presidential election the trade deficit ticked up to between $45 billion and $50 billion a month