Trump's tariffs fail to cut US trade deficit, IW report shows

BERLIN, Oct 30 (Reuters) - ‌United States ​President ​Donald Trump's economic agenda has delivered robust growth and strong investment but failed ‌to reduce the trade deficit, according to ⁠a study by the German Economic Institute IW seen ‌by Reuters on Friday.

Here ‌are some key points from the report:

• Trump's tax cuts, tariffs and drive to revive domestic ​manufacturing had produced mixed results. Gross domestic product growth remained solid and AI-related investment ⁠was buoyant, but job creation lagged the prior administration and inflation ​remained above the Federal Reserve's 2% target.

• The U.S. goods trade deficit reached $130 billion ​in August, exceeding its ‌level two years earlier, despite sweeping import tariffs.

• Trade patterns had shifted, however. ⁠The European Union's share of the deficit fell to 7% from 20% in August 2024. China's share ⁠of the trade deficit declined to 14% from 29%.

• ​Efforts to bring manufacturing back have so far fallen short. Foreign direct investment inflows fell 8.2% to $248 billion in ‌2025, 18% below the 2015–2024 average.

• The U.S.-Israeli war against Iran is ‌increasing already high public debt and pushing up ⁠interest rates, with creditors ‌questioning whether the ​U.S. can sustain its outstanding debt of $40 trillion.

(Reporting by Maria MartinezEditing by Linda ‌Pasquini)

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