US Trade Deficit Hits $130 Billion Despite Tariffs

A German Economic Institute study found that President Donald Trump’s tariffs have not reduced the U.S. goods trade deficit, which reached $130 billion in August—above its level two years earlier. The tariffs have changed the deficit’s composition: the European Union’s share fell to 7% from 20% a year earlier, while China’s dropped to 14% from 29%. The study described the broader economic results as mixed: growth and AI-related investment remained strong, but job creation trailed the prior administration, inflation stayed above the Federal Reserve’s target, and foreign direct investment fell 8.2% in 2025 to $248 billion, below its recent historical average.