Trump’s justification for the tariffs was rebalancing the trade deficit—it’s not going the way he wanted

Fortune

by Eleanor Pringle

February 20, 2026

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President Trump’s tariff strategy aimed at reducing the U.S. trade deficit has not yielded the desired results. Despite imposing tariffs to address economic and national security risks posed by the deficit, the gap between imports and exports continues to widen. In December 2025, the goods and services deficit surged to $70.3 billion, up from November’s $53 billion, driven by a significant increase in imports and a decline in exports. This imbalance highlights the limited success of Trump's trade policies in rebalancing U.S. trade flows. The data from the Bureau of Economic Analysis (BEA) reveals that while the U.S. trade deficit improved slightly on a year-over-year basis—decreasing by $2.1 billion, or 0.2%, compared to 2024—the monthly figures tell a different story. The December deficit is comparable to levels seen in late 2024 and reflects a broader trend of increasing trade imbalances throughout the year. This suggests that Trump's efforts to reduce reliance on imports and boost exports have had minimal impact, with key sectors like industrial supplies and materials experiencing a $8.7 billion decrease in surplus. However, there are signs of progress in U.S.-China trade dynamics. The overall deficit with China dropped by $93.4 billion in 2025 to $202.1 billion, driven by significant reductions in both exports and imports. This shift underscores the ongoing decoupling between the two economic giants, with China now accounting for only 7% of U.S. imports—a sharp decline from 13% in 2024. While this may reflect strategic efforts to reduce dependence on Chinese supply chains, it also points to a broader reconfiguration of global trade patterns. The implications of these developments are significant for businesses and policymakers. The persistent trade deficit raises concerns about the U.S.'s ability to maintain self-sufficiency in critical industries and national security sectors. As highlighted in Trump's 2025

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Originally published on Fortune on 2/20/2026