With the election now just one week away, Americans are weighing the two presidential candidates and choosing which one will be best for the country over the next four years.
One way they can do that is by looking back on the first term of President Donald Trump and reassessing the effectiveness of his policies.
One of the centerpieces of Trump’s first term in office has been his trade war with China. He has repeatedly cited the U.S. trade deficit with China as grounds for the trade war.
Related Link: How Trump’s Stock Market Return Compares To Obama, Bush And Other Past Presidents
Unfortunately for Trump and other Americans, the latest data from the Commerce Department indicates the U.S. trade deficit is now at its highest level since 2006.
The Commerce Department reported the August U.S. trade deficit was $67.1 billion, up from $63.3 billion in July. Through the first eight months of 2020, the US has recorded a trade gap of $421.8 billion, up 5.7% from the same period in 2019. The total U.S. trade deficit for 2019 was $576.9 billion, down 0.5% compared to 2018.
At the same time, through the first nine months of 2020, China has reported a trade surplus with the US of $218.5 billion. The US trade deficit with China was $345.2 billion in 2019, down 18% compared to 2018.
The U.S. trade deficit with China is by far the largest of any U.S. trading partner.
As the recent numbers suggest, Trump’s trade war tariffs seems to be having little impact on the overall trade deficit. The 10-year chart below highlights the increase in the US trade deficit during the Trump administration:
Another area Trump pledged to improve during the 2016 campaign was the US federal deficit. In fact, Trump said he could eliminate the deficit entirely in just eight years in office.
During President Barack Obama’s final year in office in 2016, the US deficit was $585 billion. Here’s a look at how it has changed under Trump:
- 2017: $665 billion
- 2018: $779 billion
- 2019: $984 billion
- 2020: $3.7 trillion
Prior to the COVID-19 outbreak, the deficit under Trump was already up about 68% in his first three years in office. Thanks to the pandemic, Trump’s 2020 deficit alone will be more than six times the 2016 deficit he inherited from Obama.
The good news for US investors is that US stocks have performed relatively well during the Trump presidency. The SPDR S&P 500 ETF Trust (NYSE: SPY) is up 53.9% since Election Day 2016, while the iShares China Large-Cap ETF (NYSE: FXI) is up just 17% in that time.
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