You know what President Obama never did?
He never started a trade war. He never imposed tariffs in an effort to reduce our trade deficit. He never made trade a central part of his administration. And yet Trump's regime culminated in the largest deficit we've seen since before President Obama took office.
The Commerce Department reported that our trade deficit in 2020 was the highest since 2008.
The Commerce Department said on Friday that the trade deficit jumped 17.7% to $678.7 billion last year, the highest since 2008. Exports of goods and services tumbled 15.7% to their lowest level since 2010. Imports of goods and services dropped 9.5% to a four-year low.
The plunge in exports contributed to the economy shrinking 3.5% last year, the biggest drop in gross domestic product since 1946. Trade flows have been gradually improving. For December, the trade deficit narrowed 3.5% to $66.6 billion.
The coronavirus pandemic contributed to our larger trade deficit in 2020, but there's not much reason to think things would look materially different if the pandemic never happened. Our trade deficits in 2018 and 2019 were also extraordinarily high and both years were accompanied by Trump's trade war. The trade war had already sapped foreign demand for American goods and services before the novel coronavirus appeared in Wuhan, China, but tariffs barely reduced American demand for foreign goods. Exports fell further than imports at every stage of the war.
Trump's trade war didn't create jobs, didn't reduce our trade deficit, and didn't bring factories back to America.
It feels like a very true joke to say that if Trump had done nothing at all, our trade deficit may have been lower. It was lower under Obama.