Let’s check in on Trump’s Tariff Liberation policy.
International Goods and Services Trade
Today, the Census Bureau released the International Goods and Services Trade Report for August 2026.
- The goods and services deficit was $105.6 billion in August, up $12.7 billion from $92.8 billion in July, revised, up 13.7 percent.
- August exports were $315.2 billion, $4.5 billion more than July exports, up 1.4 percent.
- August imports were $420.8 billion, $17.2 billion more than July imports, up 4.3 percent.
- The August increase in the goods and services deficit reflected an increase in the goods deficit of $12.8 billion to $136.6 billion and an increase in the services surplus of less than $0.1 billion to $31.0 billion.
Imports
- Imports of goods increased $17.2 billion to $342.2 billion in August.
- Industrial supplies and materials increased $9.1 billion.
- Crude oil increased $3.3 billion.
- Nonmonetary gold increased $3.1 billion.
- Capital goods increased $6.2 billion.
- Semiconductors increased $2.4 billion
- Other industrial machinery increased $1.3 billion.
- Computer accessories decreased $1.6 billion.
Exports
Exports of goods on a Census basis increased $4.2 billion.
- Industrial supplies and materials increased $6.3 billion.
o Nonmonetary gold increased $2.3 billion.
o Crude oil increased $2.0 billion.
o Fuel oil increased $1.2 billion. - Capital goods increased $1.3 billion.
o Semiconductors increased $1.0 billion.
o Computers increased $0.9 billion.
o Computer accessories increased $0.9 billion.
o Civilian aircraft decreased $1.0 billion. - Consumer goods decreased $2.2 billion.
o Pharmaceutical preparations decreased $2.4 billion.
Gold exports were 2.3 billion while gold imports were 3.1 billion.
Gold was not a factor this month.
Real Goods in 2017 Dollars
- The real goods deficit increased $8.7 billion, or 8.2 percent, to $114.7 billion in August, compared to an 11.1 percent increase in the nominal deficit.
- Real exports of goods increased $1.9 billion, or 1.3 percent, to $153.0 billion, compared to a
2.1 percent increase in nominal exports. - Real imports of goods increased $10.7 billion, or 4.1 percent, to $267.7 billion, compared to
a 5.4 percent increase in nominal imports.
Liberation Day Flashback
On March 21, 2025, I commented Trump’s Tax Hike ‘Liberation Day’ Day Begins April 2. Expect to Suffer
The pre-shocks have begun. But the big shock is on deck.
“It’s a liberation day for our country because we’re going to be getting back a lot of the wealth that we so foolishly gave up to other countries, including friend and foe,” Trump told reporters on Monday.
Spokesman Kush Desai said in a statement. “President Trump has assembled the best and brightest trade team in modern American history to reignite American Greatness, and they are hard at work following the same playbook.”
Prepare for Liberation
Trump is about to liberate consumers from their money and countless small businesses from their companies.
History shows tariffs raise costs and prices and lead to lasting economic harm, such as lower production and living standards, whether we keep importing goods or switch to domestic alternatives.
How Reciprocal Tariffs Will Work
Trump quickly rolled back most of his tariffs when the stock market plunged and China retaliated with rare earth export restrictions.
Otherwise, the shock would have been big enough to cause a recession.
To refresh your memory, here is a A Clear Explanation of How Reciprocal Tariffs Will Work Were Supposed to Work.
Clear Q&A Example
For example, as of March 19, 2025, New Zealand generally does not have tariffs on U.S. wool under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free trade agreement that includes New Zealand and the United States.
Q: Can I assume the US will not put a tariff on New Zealand wool?
A: Ha Ha. Reciprocal does not mean reciprocal, silly. It means whatever Trump says it means.Q: For how long?
A: Good question. Perhaps a day, a week, a month, or hours. No one has any idea.The Trump Trust Factor
Q: Why should any country believe Trump will honor any agreement he signs?
A: There is no reason and there is no trust. Trump tore up his own “best trade deal ever” USMCA.What Can Go Wrong?
Don’t worry. The trade department has more than 200 people charged with devising the reciprocal tariff plan on 200 nations and 13,000 items. For those doing the math, that’s a 2,600,000 matrix.
But here’s the beauty of it all. Whatever the team decides, Trump can rectify at a moment’s notice, based on exchange rates, VATs, non-trade barriers, drugs, and what side of the bed Trump gets up on.
So nothing can possibly go wrong.
Final Q&A
Q: Can I have a synopsis.
A: Sure. Reciprocal means whatever Trump says it means whenever he says it!How can that possibly not be perfectly clear?
Trump Theory vs Actual Results
- Trump Theory: Tariffs will reduce the trade deficit, balance the budget, provide so much money we can eliminate the income tax, and issue dividend checks to everyone.
- Actual Results: Tariffs did not balance the budget. Trump did not issue dividend checks. Tariffs increased inflation and stressed small businesses.
- Excluding tariff front-running ahead of the Liberation Day announcement, the trade deficit is the highest in history.
Don’t Worry, Here’s the Cure
Dividend Checks
The check is in the mail silly! I promise.
Meanwhile, is anyone feeling liberated from anything other than their money?
Has the Department of External Revenue opened?
The increased trade deficit is due to reduced tariffs. You complain about tariffs, then complain about the trade deficit. While ignoring the real issue — our trading partners impose tariffs on us while expecting free access to our markets.
Total tariffs paid globally on all US exports divided by total US exports: ~4%.
tariffs are higher than before trump took office. that is a fact.
trade deficit is also up since trump took office.
did you forget Trump tore up free trade agreements that he negotiated?
did you forget that Trump tariffed a bunch of uninhabited islands?
aint no stupid like Maga stupid.
The real issue is that the USA for decades earned a massive trust & open markets dividend. Until Trump squandered both.
With no diverse and plentiful agricultural and industrial production, the US need certain agricultural and industrial products that they just don’t or cannot produce and there’s nothing that tariffs can do about it.
It’s worse than that. The US has no known concentrations of bauxite to make aluminum, and high relative electricity costs to smelt bauxite into aluminum. Canada has both bauxite reserves and very low energy production costs from dams. Trump put significant tariffs on Canadian aluminum. So US auto and aircraft manufacturer’s costs to produce jump. But our competitors can buy cheap Canadian aluminum and outcompete us on world markets so our exports sink. And, even worse, since we’re no longer competitive, and profits drop due to higher input costs, we don’t need to invest in our own manufacturing skills and abilities because American’s liberty has been taken from them to buy foreign made products. Our exports begin a relative decline as well as our industrial infrastructure including workforce skills. We get poorer, and the rest of the world gets richer off of our electorate’s ignorance.
Canada bauxite reserves? It is all brought in by ship from elsewhere to the smelters located alongside hydro power dams on deep sea ports.
Stupid is as stupid does. Hard to tell whether the worse decisions come from Trump or from the folks who treat every one of his blunders like gospel.
Everything taco does turns ot shi?
I believe he will have added more to the deficit than all presidents before him combined before this is over.
Quite impressive for him, doesn’t speak well for those of us that stand by and watch it happen.
And this was totally obvious one year into his first term. The man is a walking talking clusterF.
Econ 101. Our trade deficit is mostly a result of the government deficit. Tariffs won’t do much. All that money sloshing around gets spent somewhere, much of it on imports. The inconvenient truth? US aggregate incomes after tax are not sustainable at these levels.
the government deficit and the trade deficit go hand in hand.
Not really. Your trade deficit is a dual factor from being reserve currency, and the consequential abuses that provides for.