Tag: trump tariffs
Soaring Trade Deficit In August Suggests Trump Tariffs Are Failing

Soaring Trade Deficit In August Suggests Trump Tariffs Are Failing

It’s been almost a year and a half since “Liberation Day,” the day that Trump announced his “reciprocal” tariffs, slapping tariffs on imports from our trading partners to punish them for selling us stuff. Ostensibly, the goal of the tariffs was to eliminate, or at least reduce, our trade deficit.

Trump seems to believe that we are being ripped off if we buy more goods from a country than we sell to them. There can be problems caused by a large trade deficit, especially one that is rapidly growing, as was the case in the first decade of this century. But it doesn’t make sense to claim a country is ripping us off by selling us stuff.

Anyhow, whatever problems we have with trade are poorly addressed by the sort of blanket tariffs imposed by Trump. We may want tariffs to promote the development of certain industries, like solar panels or EVs, or to ensure a stable supply of essential products, like steel and rare earth minerals, but such efforts have little to do with Trump’s tariffs.

He said that he wanted to end the ripoff, which he defined as our trade deficit. It hasn’t worked out that way.

The monthly deficit had been around $90 billion through 2023. (Note that these are advance numbers based on incomplete data. They are generally higher than the final data the Census Bureau releases later.) It rose gradually in 2024, as the growth of the U.S. economy outpaced the growth of our trading partners. This caused U.S. imports to rise more than our exports to other countries. By the election, the trade deficit was up to $110 billion. It then began to rise more rapidly as consumers and businesses stocked up on imported goods in anticipation of Trump’s tariffs. The deficit hit an all-time record of $158.7 billion in March of 2025.

The deficit then fell both due to the impact of the tariffs and also because of the advance purchases in anticipation of the tariffs. By December, the deficit had risen back to $100 billion a month, roughly the same as the pre-election level.

The deficits have increased sharply again in 2026, driven in large part by a surge in semiconductor chips due to the AI boom. The August level of $132.6 billion is the second-highest deficit on record, topped only by last year’s March deficit.

It is worth mentioning that the U.S. runs a substantial surplus on services, collecting around $30 billion more each month on items like patent and copyright fees, insurance, and financial services than what we pay to foreigners. I’m not sure if this means we’re ripping them off, but that is part of the larger score on the trade balance.

Dean Baker is a senior economist at the Center for Economic and Policy Research and the author of the 2016 book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Please consider subscribing to his Substack, from which this is reprinted with permission.

As Trump Keeps Screwing America's Farmers, When Will They Fight Back?

As Trump Keeps Screwing America's Farmers, When Will They Fight Back?

There’s a reason Republicans are fighting for their lives in farm states like Nebraska, Iowa, Ohio, Kansas, and Michigan.

Tariffs have decimated overseas markets, mass deportations have stripped farms of labor, and soaring diesel prices have driven up operating costs. All of it means greater expenses and tighter margins for an industry already under tremendous financial strain.

None of this is new; President Donald Trump also screwed farmers during his first term, forcing Republicans to shovel billions of dollars into farm bailouts to mitigate the damage.

But like moths to a flame, rural voters overwhelmingly pulled the lever for Trump again in 2024.

What is it they say is the definition of insanity? Doing the same thing over and over again and expecting a different result?

Well, here we are again, and rural America is paying for it again.

Like with fertilizer, specifically potash—a potassium-rich salt that is one of the basic ingredients in fertilizer.

U.S. farmers need a lot of it. And fortunately for us, about 90 percent of the potash used by U.S. agriculture comes from Canada.

Canada is the world’s largest potash producer. Other major producers include Russia and Belarus—both subject to Western sanctions after Russia invaded Ukraine—and China, with which Trump has been waging his trade wars.

Looking at that list, it sure was lucky for us to have our greatest friend and ally sitting right next door, willing and able to provide U.S. farmers with nearly all of the potash they need.

Or needed, past tense. Because, of course, Trump started a bizarre fight with Canada, demanding it become the 51st state, implementing senseless tariffs, and repeatedly antagonizing its leaders.

Meanwhile, Trump’s unnecessary war in Iran closed the Strait of Hormuz—the transit point for one-third of the world’s potash supply—sending other fertilizer costs soaring. Nitrogen fertilizer was hit particularly hard, adding yet another expense for already struggling farmers.

So what was Trump’s brilliant solution to this fertilizer problem? Belarus!

“The United States is working on a massive Deal with respect to the purchase of Potash from Belarus. The pricing would be for substantially less than we are currently paying to Canada, very good news for our Farmers and Ranchers,” Trump triumphantly posted on Truth Social.

Take THAT, Canada!

Why buy fertilizer from our democratic ally next door when we can get it from a brutal, repressive, pro-Putin dictatorship thousands of miles away? Art of the deal, baby!

Except there was one small problem: Trump actually sucks at deals, and it turns out that Belarus doesn’t have any potash to sell us.

“Belarus cannot supply the United States with large volumes of potash, its leader, Alexander Lukashenko, said, seemingly refuting U.S. President Donald Trump’s claim that Washington was in talks with Minsk to purchase the vital agricultural fertilizer,” reported UPI. “Even if we wanted to supply [potash] to other, Western markets, we simply do not have those volumes—everything is contracted for this year.”

And even if Belarus did have enough lying around, there’s another hilarious wrinkle: Belarus is landlocked, the European Union bans Belarusian potash imports, and any major shipments to the United States would likely have to travel through Russian ports.

So Trump’s master plan for helping U.S. farmers is to reduce their dependence on fertilizer from Canada by buying it from Vladimir Putin’s closest ally and shipping it through Russia.

So did Trump just lie, or did he … oh who cares? His brain is Swiss cheese. And those very farmers he thinks he’s talking to know that he’s talking nonsense. They know they can’t get potash anywhere, and they know it’s just one more way they’re fucked come next year’s growing season.

So on top of everything else that Republicans will face in the runup to the 2028 election, food shortages on top of historically large farm bankruptcies are now on the table.

Farm bankruptcies were already up 46 percent last year, including a 70 percent increase in the Midwest. Fertilizer is getting more expensive, fuel is getting more expensive, export markets have been disrupted, and labor is harder to find.

The best-case scenario is that farmers end up paying up the wazoo for whatever source they ultimately find, compounding inflation and prices at the grocery store.

And, as is the case with literally everything relating to Trump, it was self-inflicted. All that he had to do was literally nothing, take credit for former President Joe Biden’s economy, and things would be relatively okay and normal.

But Trump is a chaos monkey, and it’s biting his strongest supporters in the ass. So will they learn, or will they still choose to hate on trans kids over their literal way of life?

Stay tuned.

Markos Moulitsas is founder and editor of the blogging website Daily Kos and author of three books.

Reprinted with permission from Daily Kos





adam hamilton

What's The Matter With Kansas' Senators? Republicans May Soon Find Out

The home of Dwight Eisenhower and Amelia Earhart is rarely part of the national conversation — but that could be about to change. It is becoming clear that the race for Senate this year could be a huge upset. In the 19th century, Kansas was the scene of violent clashes over slavery, which temporarily earned it the moniker "bleeding Kansas," and in the 20th it was the birthplace of Brown v. Board of Education, one of the most consequential Supreme Court cases in American history.

But in recent decades, it's been a backwater, mostly due to its size (a bit under three million people) and political lopsidedness. Kansas has gone red in every presidential contest since 1968 and hasn't sent a Democrat to the Senate since 1932.

In light of that history, it would be foolish to get one's hopes up too much about the Senate contest there this year. After all, the Republican incumbent, Roger Marshall, won his 2020 race by more than 11 points. But he isn't sounding confident. At a recent debate, he bellowed over boos from the crowd, "What you're going to get from me — you may not agree with me on everything — but you're going to know exactly where I stand." That sounds like someone who feels trapped and is making a virtue of necessity.

Marshall is trapped. Like nearly all Republicans, he has lashed himself to Trump as Odysseus bound himself to the ship's mast. He has bowed and scraped to MAGA with the best of them, even going so far as to praise Robert F. Kennedy Jr.'s cracked Make America Healthy Again agenda while measles deaths mount — and now he cannot escape.

Midterm elections are nearly always referenda on the sitting president. You can track the out party's likely performance by knowing the popularity of the incumbent president. Though Kansans have a higher opinion of Trump than most of the country, his standing in the state has eroded. At the start of his second term, 60 percent of Kansans had a favorable opinion of Trump. Today, only 47 percent do. Among independents, 59 percent disapprove.

Like the rest of the country, Kansas has been burdened by high costs, but it's been particularly hard hit by Trump's trade and immigration policies. A Wichita State professor of international business estimates that Kansas is one of the most trade-dependent states in the country. One in six jobs in the state is directly tied to exports. Some tariffs might temporarily boost prices for some domestic products, like beef (which helps ranchers), but the chaotic implementation of the tariffs vitiated even that scant benefit.

After imposing tariffs on imported beef, Trump repeatedly withdrew or weakened them, only to announce in August that the United States would suspend quotas on up to 660 million pounds of imported ground beef in an effort to reduce prices at the supermarket. As Americans have fully digested by now, tariffs are taxes that raise the prices of things we buy.

Agriculture Secretary Brooke Rollins, whose last foray into helping consumers was a recommendation that we all raise chickens in our backyards, seems unwilling to acknowledge the inevitable conflict between pandering to producers and pandering to consumers. She announced that the new policy would "protect the American rancher" and "the American consumer." This was tough for both of Kansas' Republican senators to swallow (as it were). Marshall said he was "frustrated" by the president's actions, while Terry Moran, apparently asleep for the past 10 years as Trump has flattened every laissez-faire principle imaginable, urged the president to "let the free market work."

Kansas' beef with the administration goes beyond cattle. Kansas is the largest wheat-producing state in the union, and the twin blows of record-high diesel fuel prices and rising costs of fertilizer due to the closure of the Strait of Hormuz have been painful. This year, farmers are in doubt about how much to plant as export markets have been thrown into turmoil by Trump's trade wars. Marshall bleats wanly that "the tariffs are working," but tariffs on steel and aluminum have damaged the state's large aviation industry, and as one small business owner observed sourly, her fertilizer bill has tripled this year and her diesel bill has doubled.

One of Kansas' largest employers is the Canadian aviation firm Bombardier, which employs more than 1,500 people (and 2,000 more in other states). While slapping Canada around, Trump has name-checked Bombardier, saying their products are not "good enough" and threatening to ban sales of their products in the United States. (If their products are so bad, why are people willingly buying them?) Employees at one of Bombardier's Wichita plants were rattled.

One told a Washington Post reporter, "This is ridiculous. We have thousands of Americans working here." The Post delicately added that the employee used a profanity. Kansas' two Republican senators are looking at their shoes and kicking sand, though Marshall did post that "I'm going to fight to keep Bombardier's over 1,200 Kansas jobs. I've already taken that concern inside the Oval Office."

How reassuring that must be.

Here's another reason Marshall has cause to feel trapped: The Democrats have chosen a fantastically appropriate challenger. No DSA-adjacent progressive here. Instead, they nominated Adam Hamilton, pastor of the Church of the Resurrection, the largest Methodist congregation in the United States.

Hamilton is an articulate moderate, author of 30 books, who agrees that the border was out of control under Biden but notes that the indiscriminate meat cleaver approach to immigration enforcement under Trump is damaging both economically and morally. "So right now, when you travel to southeast, southwest Kansas, you're talking to people in the meatpacking industry, the cattle industry, and they're saying, 'Forty percent of our workforce are immigrants, and we need them, and we care about them.'"

Later he continued, "Stop demonizing them. Figure out a plan to bring immigrants in where it's legal for them to be here, and where we can welcome them instead of [them] having to live in fear in our businesses or our communities."

Hamilton's statistics are accurate, or perhaps a bit understated. Without those immigrant employees at meat processing facilities, prices of meat will climb even higher, to say nothing of the cruelty of uprooting families with long ties to the community and no criminal offenses of any kind.

Hamilton calls Trump's tariffs "a disaster for everyone across the state of Kansas," and hits the corruption theme hard. That's exactly the kind of Democrat a Republican state demands.

Kansas is red, it's true. But it has often chosen Democrats for governor, including incumbent Laura Kelly. So it isn't as if Kansans' fingers just can't check off a Democratic box. After Hamilton won the primary, the Cook Political Report moved the race from "solid" to "likely" Republican. It is probably still Marshall's race to lose, but the tailwind for Hamilton reflects just how badly Trump has betrayed his own base as well as the opportunities that open up when a) there's a wave building, and b) the nominee matches the constituency.

Mona Charen is policy editor of The Bulwark and host of the "Beg to Differ" podcast. Her new book, Hard Right: The GOP's Drift Toward Extremism, is available now.

Reprinted with permission from Creators








Agriculture Secretary Brooke Rollins, whose last foray into helping consumers was a recommendation that we all raise chickens in our backyards, seems unwilling to acknowledge the inevitable conflict between pandering to producers and pandering to consumers. She announced that the new policy would "protect the American rancher" and "the American consumer." This was tough for both of Kansas' Republican senators to swallow (as it were). Marshall said he was "frustrated" by the president's actions, while Terry Moran, apparently asleep for the past 10 years as Trump has flattened every laissez-faire principle imaginable, urged the president to "let the free market work."

Kansas' beef with the administration goes beyond cattle. Kansas is the largest wheat-producing state in the union, and the twin blows of record-high diesel fuel prices and rising costs of fertilizer due to the closure of the Strait of Hormuz have been painful. This year, farmers are in doubt about how much to plant as export markets have been thrown into turmoil by Trump's trade wars. Marshall bleats wanly that "the tariffs are working," but tariffs on steel and aluminum have damaged the state's large aviation industry, and as one small business owner observed sourly, her fertilizer bill had tripled this year and her diesel bill had doubled.

One of Kansas' largest employers is the Canadian aviation firm Bombardier, which employs more than 1,500 people (and 2,000 more in other states). While slapping Canada around, Trump has name-checked Bombardier, saying their products are not "good enough" and threatening to ban sales of their products in the United States. (If their products are so bad, why are people willingly buying them?) Employees at one of Bombardier's Wichita plants were rattled. One told a Washington Post reporter, "This is ridiculous. We have thousands of Americans working here." The Post delicately added that the employee used a profanity. Kansas' two Republican senators are looking at their shoes and kicking sand, though Marshall did post that "I'm going to fight to keep Bombardier's over 1,200 Kansas jobs. I've already taken that concern inside the Oval Office."

ADVERTISING

How reassuring that must be.

Here's another reason Marshall has cause to feel trapped: The Democrats have chosen a fantastically appropriate challenger. No DSA-adjacent progressive here. Instead, they nominated Adam Hamilton, pastor of the Church of the Resurrection, the largest Methodist congregation in the United States.

Hamilton is an articulate moderate, author of 30 books, who agrees that the border was out of control under Biden but notes that the indiscriminate meat cleaver approach to immigration enforcement under Trump is damaging both economically and morally. "So right now, when you travel to southeast, southwest Kansas, you're talking to people in the meatpacking industry, the cattle industry, and they're saying, 'Forty percent of our workforce are immigrants, and we need them, and we care about them.'" Later, he continued, "Stop demonizing them. Figure out a plan to bring immigrants in where it's legal for them to be here, and where we can welcome them instead of (them) having to live in fear in our businesses or our communities."

Hamilton's statistics are accurate, or perhaps a bit understated. Without those immigrant employees at meat processing facilities, prices of meat will climb even higher, to say nothing of the cruelty of uprooting families with long ties to the community and no criminal offenses of any kind.

Hamilton calls Trump's tariffs "a disaster for everyone across the state of Kansas," and hits the corruption theme hard. That's exactly the kind of Democrat a Republican state demands.

Kansas is red, it's true. But it has often chosen Democrats for governor, including incumbent Laura Kelly. So it isn't as if Kansans' fingers just can't check off a Democratic box. After Hamilton won the primary, the Cook Political Report moved the race from "solid" to "likely" Republican. It is probably still Marshall's race to lose, but the tailwind for Hamilton reflects just how badly Trump has betrayed his own base as well as the opportunities that open up when a) there's a wave building, and b) the nominee matches the constituency.

ADVERTISING

Mona Charen is policy editor of The Bulwark and host of the "Beg to Differ" podcast. Her book, "Hard Right: The GOP's Drift Toward Extremism," is available now.

Photo credit: chris robert at Unsplash

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Macron and Trump

Enraged By Rate Hike, Trump Threatens To Expand Trade War Again (Huh?)

Donald Trump seems determined to outdo himself on crazy every day. Many people thought he had hit peak crazy when he threatened to tear down the Kennedy Center if they wouldn’t let him put his name on it, but he quickly took crazy to the next level. He is now threatening to cut off trade with some countries because the Fed raised interest rates on Wednesday.

If the threat to cut off trade as a response to a Fed rate hike doesn’t make sense to you, don’t worry. It doesn’t make sense. It’s not clear what Trump imagines he can accomplish by cutting off trade with a country. It will hurt the country with whom we stop doing business, just as it would hurt Michigan if Ohio stopped trading with it, but it will also hurt American households. The loss of imports will mean shortages and higher prices. If we also stop exports to a country, it will mean a loss of jobs.

Trump didn’t say which countries he wanted to end trade with, but we can have some fun speculating. So here are my top three candidates, along with the items where our markets would be most affected.

Canada

Trump would almost certainly put Canada at the top of his list of trade enemies. After all, they sell us all sorts of things; what could be worse than that? This is probably the most absurd of Trump’s targets. Canada has been a close ally for more than a century. Their trade is being governed by a trade agreement negotiated by Donald Trump in his first term, which Trump insists was signed by a stupid president.

The largest import from Canada is 3.9 million barrels a day of oil, roughly 20% of our total consumption. If Trump were to suddenly cut off this flow, to make good on his plan to end trade with Canada, we can expect an enormous surge in gas prices, likely on the order of several dollars a gallon. There would almost certainly be shortages in many areas as new distribution networks would need to be established.

Another major import is cars and car parts, which came to $45.8 billion last year. This would put upward pressure on vehicle prices due to less competition, but more importantly, it would throw a huge monkey wrench into the domestic industry. More of the parts used in assembling vehicles in the United States come from Canada. In principle, these parts can be produced here, but it would take many years to develop this capacity. In the meantime, our industry would be seriously hampered by the inability to get necessary parts. Again, this almost certainly means much higher car prices and shortages of many models.

Two other major imports are lumber at $10.2 billion and aluminum at $9.7 billion. These are both intermediate inputs into the production process. If we lost access to imports from Canada look to much higher house prices, as new construction becomes far more expensive. Similarly, it will be difficult to replace the aluminum the U.S. gets from Canada. This would make airplanes and other products produced in the United States far more expensive.

Spain

Spain likely also features prominently on Trump’s target list. Spain’s prime minister, Pedro Sanchez, has repeatedly stood up to Trump openly. He refused to go along with Trump’s demand that NATO countries increase their military spending to 5% of GDP. He also has been extremely critical of Israel’s mass murder of Palestinians. This has led to explicit warnings of retaliation from Netanyahu. Trump may opt to ban trade with Spain as part of this retaliation.

Spain is a much less consequential trading partner than Canada, being on the other side of the Atlantic and also orienting most of its trade towards the European Union. Our largest imports from Spain are $2.9 billion in pharmaceutical products, $2.6 billion in machinery, and $2.0 billion in electrical equipment.

None of these are especially large for the U.S. economy, but the loss of imports from Spain would almost certainly mean selective shortages and higher prices. Again, these items can be replaced with imports from elsewhere and domestic production, but it will take time.

France

A third likely target is France, first and foremost because its president, Emmanuel Macron, is articulate and internationally respected, and far better looking than Donald Trump. Along with the rest of the European Union, he also has refused to go along with Trump’s war on Iran.

Our largest imports from France are similar to the ones from Spain, but the amounts are much larger: pharmaceutical products, $11.6 billion, machinery $10.5 billion, and aircraft and parts, $6.1 billion. These can be replaced, but not overnight. A cutoff of trade would lead to shortages in many items and lead to serious upward pressure on prices.

How Much Will Americans Pay for Trump’s Quixotic Trade War?

These are my top three candidates for Trump’s trade embargo, but who knows? Trump’s trade wars are not being driven by any rational strategy; it is a question of who happens to get him angry over something, and who will bribe him to not cut off trade.

It’s also possible that Trump just backs down or forgets about his threats. That happens all the time. How many times has he said he was going to destroy Iranian civilization and then, thankfully, forgotten or ignored his threat? Remember the 50% tariffs he threatened to impose on India for buying Russian oil? Trump doesn’t seem to.

Trump makes all sorts of half-baked threats all the time, and the absurd threat to retaliate against a Fed rate hike with random trade embargos is certainly a serious half-baked threat. But it is one that people should keep an eye on.

If Trump does move forward on the threat, it would amount to a big new tax and economic disruption at a time when most people are already feeling pinched. If Trump has his little embargo(s) before the election, it would likely further damage Republican electoral prospects. If he plans to wait until after the election, I guess Republicans can say that the taxes and shortages are their reward for having Trump in the White House.

Dean Baker is a senior economist at the Center for Economic and Policy Research and the author of the 2016 book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Please consider subscribing to his Substack, from which this is reprinted with permission.

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