Originally published at NBC News with my quote below.

​President Donald Trump has repeatedly criticized the nation’s trade deficit, which the Commerce Department reported Wednesday reached a new record high. 
​
But the same Commerce report showed the value of American exports had also hit a new record, indicating there’s still strong demand for U.S. goods and services abroad.

A trade deficit simply means a country is importing more than it is exporting. As the Congressional Research Service reported in 2018, Trump’s fixation on reversing the deficit “contrasts with the views of most economists.”
Maintaining a deficit usually says little about the state of a country’s economy. The U.S. trade deficit reflects strong domestic growth and consumption, especially relative to the weaker economic performance seen in many parts of the world, including most other Western developed countries. 

“Trade helps us to be better off,” said Vance Ginn, an economist and adviser in Trump’s first term.  Whether it is sourcing goods that the U.S. no longer produces or which can be produced more cheaply elsewhere, large American import levels reflect strong demand from consumers for stuff — and the U.S. economy as a whole generally benefits from this arrangement, Ginn said.

Countries with large trade surpluses, such as China, Russia and Saudi Arabia, tend to be heavy exporters of natural resources with relatively lower rates of domestic consumption. 
Trump has indicated he may prefer the U.S. to more closely resemble this group of nations. In his executive order last week laying out his new administration’s trade priorities, “investigating the causes of our country’s large and persistent annual trade deficits in goods” was the first item listed. 

Asked what Canada and Mexico needed to do to avoid sweeping new 25% tariffs, Trump said Sunday, “They have to balance out their trade, number one. We have deficits with almost every country — not every country, but almost — and we’re going to change it.”

Because Americans tend to buy more and save less than those ib other countries, a deficit persists. Economists are nearly unanimous that Trump’s call for tariffs to reverse the deficit would raise costs for U.S. consumers — and the president himself recently acknowledged their imposition would likely lead to “pain” for some time.  
  
Trump often cites William McKinley, a former U.S. president who, as a congressman, helped implement massive trade duties, as his lodestar for how he believes the U.S. economy should be run. McKinley was indeed successful in raising large sums of money for the U.S. government several decades before the first national income tax was implemented. 

However, by the time McKinley was sworn in as president in 1897, the country’s transition from an agrarian to an industrialized economy had accelerated, and he ultimately abandoned the use of tariffs in favor of reciprocal trade agreements. 

There may have been a point in the 1980s and 1990s when America’s widening trade deficit began to cause problems again. In testimony before the U.S. Senate in 1998, Robert Scott, an economist with the left-leaning Economic Policy Institute, said trade imbalances had likely contributed to 2 million manufacturing job losses between 1979 and 1994, with hundreds of thousands resulting from the 1992 North American Free Trade Agreement alone — a pact Trump repeatedly criticized before replacing it with the United States-Mexico-Canada-Agreement in 2018. His latest volley of tariffs would contravene that very deal, which is up for review in the middle of next year.

Along with the lost jobs was the effect on wages, Scott said. Since 1979, Americans’ inflation-adjusted earnings have risen only by 12%, even as the size of the overall U.S. economy has grown exponentially during the same period. Wealth inequality, too, accelerated during this time.

The Wall Street Journal’s right-leaning editorial board has noted the “contradictions” of Trump’s economic policies. 
“Mr. Trump likes tariffs and wants more of them, but he also wants a weaker dollar to promote U.S. exports, and the two desires are in conflict,” it said this week. 

Most economists, left and right, believe that at this point, it would be extremely difficult to bring back a meaningful number of manufacturing roles — and that those that still exist currently benefit from lower trade barriers and, in some cases, recent federal programs designed to prop up key industries like semiconductor manufacturing. 

“It would be better if Mr. Trump and his crew dropped the strong dollar-weak dollar chatter and focused on a stable dollar,” the Journal’s editorial board wrote. “That’s what inflation-weary Americans elected the President to do.”

​Major changes are underway in the federal government with Trump in office. He's tackling the size and scope of government, which is a long overdue move. We’re also gaining more insight into President Trump’s plans to impose tariffs, which could raise American prices. Now is the time for bold reforms—whether it’s slashing government spending, championing free markets, or encouraging innovation to maintain our global competitiveness. In this episode, I also explore a Texas school choice bill, a new competitor in the AI sector, calls to abolish the CFPB and much more. Thanks for joining me in this episode of "This Week's Economy."

​For more insights, visit vanceginn.com and get even greater value with a paid subscription to my Substack newsletter at vanceginn.substack.com.

​Watch my interview in NTD News on 1/31/2025.

Overview
The Trump administration, supported by a Republican-led Congress, has a pivotal chance to reverse the damage inflicted by the Biden administration's misguided antitrust policies. This report outlines the path to unleashing America’s tech potential through innovation, competition, and free-market principles.

Key Points

• Restore the Consumer Welfare Standard: Antitrust enforcement should prioritize consumer benefits rather than penalizing success or favoring bureaucratic control.
• Boost Innovation and Investment: The U.S. tech sector leads global innovation with $450 billion in annual R&D investments, which drive advancements in AI, biotechnology, cybersecurity, and energy.
• Empower Small Businesses and Entrepreneurs: Platforms like Amazon and eBay provide tools for small businesses to reach global markets and fuel regional economic growth.
• Create High-Paying Jobs: The tech industry directly employs 9.4 million workers, with a ripple effect creating additional opportunities in manufacturing, logistics, and construction.
• Enhance National Security: U.S. leadership in AI and quantum computing is essential for maintaining a strategic edge against China and other global adversaries.
• Reject Regulatory Overreach: Excessive regulation under Biden stifled innovation and increased costs for consumers. Removing these barriers will restore competitive markets.
• Encourage Mergers and Acquisitions (M&A): Smart M&A policies enable technological breakthroughs and ensure the U.S. remains an innovation hub, unlike Biden-era policies that blocked critical deals.
• Protect Financial Security: The tech sector underpins the financial stability of millions of Americans, playing a vital role in retirement accounts and pension funds.
• Strengthen Global Competitiveness: By rejecting European-style overregulation and authoritarian state subsidies, the U.S. can maintain its technological dominance and foster free-market innovation.

Conclusion
​The report highlights a roadmap for the Trump administration and Congress to promote free-market policies, secure America’s technological leadership, and prioritize innovation and economic growth. Confirming regulatory leaders who support these principles is vital to achieving these goals.

​Today, we mark the inauguration of Donald J. Trump as President of the United States. As he takes office, many are eager to see significant policy shifts to boost the economy, create jobs, and empower American businesses. The first 100 days will be crucial in shaping the path to prosperity through executive actions, strong leadership, and strategic pressure on Congress. This period could see bold moves to cut government spending, unleash energy potential, and create opportunities for workers and businesses.

Thanks for joining me in this episode of "This Week's Economy." For more insights, visit vanceginn.com and get even greater value with a paid subscription to my Substack newsletter at vanceginn.substack.com.