BERLIN: 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.
