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Trump’s America First trade strategy is working exactly as advertised.
Hassett revealed that Trump has “cut the trade deficit in half from last year.”¹
That stunning reversal undercuts years of elite consensus claiming trade deficits did not matter and could not be fixed. Trump argued for decades that bad trade deals gutted American manufacturing while enriching foreign competitors, particularly China. Now the data backs him up.
The timing could not be worse for Democrats who spent all of 2025 insisting tariffs would collapse the economy.
Instead, the opposite happened.
Another bombshell on the federal deficit
Hassett did not stop there.
He followed up with another data point that undercuts the entire Democrat spending narrative.
“It’s looking like the deficit for this year will be $600 billion lower than it was last year,” Hassett explained.¹
That statement alone dismantles years of fearmongering about Trump’s fiscal policies. Democrats demanded trillions in new spending programs while accusing Trump of reckless budgeting. Now the numbers show Trump delivering deficit reduction while restoring American leverage abroad.
Larry Summers lashes out as facts pile up
Predictably, the economic establishment reacted with panic.
Former Obama Treasury Secretary Larry Summers rushed onto ABC to attack Trump’s policies, even as the numbers moved in the opposite direction.
“This is the biggest self-inflicted wound we’ve put on our economy in history,” Summers claimed.²
Summers’ remarks landed with little credibility given his long history of failed predictions. Over the past two decades, Summers has repeatedly warned of disasters that never materialized while missing real economic threats.
In 2021, Summers famously warned that Biden’s stimulus plan was the “least responsible macroeconomic policy in 40 years.”³ He later blamed inflation entirely on government spending, a theory widely challenged by other economists.
Multiple analysts pointed instead to supply chain breakdowns and corporate price manipulation as the real drivers of inflation.⁴
The American Prospect slammed Summers for “science denial about inflation” after he continued pushing theories contradicted by data.⁴
Summers also insisted mass unemployment was necessary to tame inflation.⁵ That prediction collapsed when inflation cooled without the recession he demanded.
His reputation deteriorated so badly that Joe Biden declined to give him any role in the administration.⁶
Trump’s trade strategy produces real world results
While establishment economists argue on television, Trump’s policies are reshaping global trade.
Treasury Secretary Scott Bessent told The New York Times that tariffs are “good for labor” and are generating major revenue while restoring balance to U.S. trade relationships.⁷
The White House confirmed that November’s federal deficit was cut by more than half compared to the same month last year, fueled by rising tariff revenue.⁸
Trade deficits with China have narrowed to their second smallest level since 2009.
Exports surged at a 4.1 percent annual rate during the third quarter, while imports fell roughly 5 percent. That shift added approximately one percent to real GDP growth.⁸
Trump’s tariffs also forced the world back to the negotiating table.
More than 50 countries reached out to renegotiate trade deals once tariffs went into effect.² Improved agreements were secured with nations representing over half of global GDP, including the United Kingdom, European Union, Japan, China, South Korea, Indonesia, and Malaysia.⁸
Biden’s record tells a very different story
The contrast with the Biden years is stark.
In 2024, the U.S. trade deficit with China reached $263.3 billion, higher than the previous year.⁹ Deficits with Canada, Mexico, and the European Union also surged while Biden refused to confront unfair trade practices.⁹
Trump returned to office and immediately reversed the trend.
Countries that ignored American concerns under Biden now rush to negotiate because they know Trump enforces consequences.
The establishment cannot admit Trump was right
Left wing think tanks and media allies continue to spin the data.
They point to early 2025 import spikes caused by companies rushing goods in before tariffs took effect. That short term distortion ignores what happened after tariffs were implemented.
Imports declined. Exports stabilized. The trade deficit shrank. Manufacturing investment returned to U.S. soil.
Budget activists claim tax cuts are “blowing holes” in the deficit while ignoring spending reductions through DOGE and record tariff revenue.
Institutions like the Peterson Institute attack Trump while protecting the same global trade system that hollowed out American factory towns.
The results are undeniable.
Manufacturing jobs are returning. Trade imbalances are shrinking. The deficit is falling. Growth continues despite elite predictions of recession.
Democrats cannot explain it because Trump’s success demolishes their entire worldview.
They said globalization was permanent. Trump proved it was a choice.
They said trade deficits did not matter. Trump proved they do.
They said manufacturing would never come back. Trump proved them wrong.
And that is why they are panicking.
