IW study: Trump’s tariffs did not reduce the US trade deficit — Jerusalem Post

In the United States, President Donald Trump’s tariffs did not reduce the goods trade deficit, which reached $130 billion in August and exceeded the figure from two years earlier. This is stated in a study by the German Economic Institute (IW), reviewed by Reuters, reports the Jerusalem Post.

Changing structure of the deficit

Despite large-scale import tariffs, the US goods trade deficit did not decrease. However, its structure changed: the European Union’s share of the deficit fell to 7% in August, compared with 20% in August 2024. China’s share decreased to 14% from 29%.

Researchers assessed the results of Trump’s economic policy, which included tax cuts, tariffs, and a course toward bringing industrial production back to the United States, as mixed. Gross domestic product growth remained stable, while investments related to artificial intelligence were active.

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Investment and employment

At the same time, the pace of job creation lagged behind that of the previous administration, while inflation remained above the Federal Reserve’s 2% target.

Efforts to bring manufacturing back to the country have also not yet produced the expected result. Foreign direct investment inflows into the United States fell by 8.2% in 2025, to $248 billion. This is 18% below the average level for 2015–2024.