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Growth up, deficit holds
A study by the German Institute for Economic Research found that Donald Trump’s policies fueled strong growth and a surge in AI investment, but failed to reduce the trade deficit. The U.S. goods trade deficit reached $130 billion in August despite tariffs. The EU’s share of the deficit fell to 7%, and China’s to 14%, while inflation remained above the Federal Reserve’s 2% target and job creation was slower than under the previous administration. Efforts to revive manufacturing also fell short of their goals. Foreign direct investment declined by 8.2% to $248 billion in 2025, while the war with Iran added to the pressure on U.S. debt, which stands at $40 trillion.
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