Trump's "Trade War" Is Working: US Trade Deficit Collapses

One month after the biggest plunge in the US trade deficit since the financial crisis - good news for Trump who has engaged in "trade war" with the rest of the world to boost US trader and exports - the good news continued in April, when according to the Census Bureau, the US deficit shrank again, down 2.1% from a revised $47.2BN to $46.2BN - the lowest since September 2017, and beating not only the $49BN consensus estimate, but also also the lowest Wall Street estimate of $46.2BN.

The number was so good, some were wondering why Trump didn't pre-tweet it, as he did with the payrolls report.

Incidentally, with today's revision, the March plunge in the US trade deficit has now risen to $10BN, the highest since 2008, and the second biggest improvement in the US deficit on record.

According to the census bureau, the deficit decreased from a revised $47.2 billion in March to $46.2 billion in April, amid a perfect trade environment as exports rose and imports declined for the second month in a row, or as Trump would say, "his policies to boost US trade worked."


Broken down by category, the goods deficit decreased $1.0 billion in April to $68.3 billion. The services surplus decreased less than $0.1 billion in April to $22.1 billion.

The good news: exports of goods and services increased $0.6 billion, or 0.3%, in April to $211.2 billion. Exports of goods increased $0.3 billion and exports of services increased $0.3 billion.

  • The increase in exports of goods mostly reflected increases in industrial supplies and materials ($1.3 billion) and in foods, feeds, and beverages ($0.7 billion). A decrease in capital goods ($1.4 billion) partly offset the increases.
  • The increase in exports of services mostly reflected increases in other business services ($0.1 billion), which includes research and development services; professional and management services; and technical, trade-related, and other services, in financial services ($0.1 billion), and in charges for the use of intellectual property ($0.1 billion).

Also good news, if only for GDP bean-counters: imports declined, decreasing by $0.4 billion, or 0.2%, in April to $257.4 billion. Imports of goods decreased $0.7 billion and imports of services decreased $0.3 billion.

  • The decrease in imports of goods mostly reflected decreases in consumer goods ($2.8 billion) and in automotive vehicles, parts, and engines ($0.9 billion). Increases in other goods ($1.3 billion) and in industrial supplies and materials ($1.2 billion) partly offset the decreases.
  • The increase in imports of services mostly reflected increases in transport ($0.1 billion), in other business services ($0.1 billion), and in charges for the use of intellectual property ($0.1 billion)

Broken down by trading partner, the March figures showed surpluses with South and Central America ($4.1), Hong Kong ($2.2), United Kingdom ($0.9), Singapore ($0.7), and Brazil ($0.6

Meanwhile, the countries that should be worried that they may fall in Trump's trade war sights, and recorded deficit with the US in March, included China, of course, with a $30.8 billion deficit, down sharply from $34.2 billion a month earlier, but also the European Union ($13.2), Mexico ($6.0), Japan ($5.9), Germany ($5.6), OPEC ($3.3), Italy ($2.4), India ($2.0), Canada ($1.7), France ($1.6), South Korea ($1.3), Taiwan ($1.1), and Saudi Arabia ($0.9).

Finally, to help Trump make his economic case even stronger, the US deficit excluding petroleum products: after hitting a record in February, continued its dramatic improvement in April, suggesting that whatever Trump is doing to boost overall trade (we already know US petroleum exports are soaring), may be working, as it shrank from over $50BN in February to just $41BN in April.

And now, we expect even more upward revisions to Q2 GDP, which according to the Atlanta Fed will now likely print above 5.0%


curbjob Wed, 06/06/2018 - 08:49 Permalink

"Incidentally, with today's revision, the March plunge in the US trade deficit has now risen to $10BN, the highest since 2008, and the second biggest improvement in the US deficit on record."

mmm, I wonder what happened in 2008 ?

ravolla Rapunzal Wed, 06/06/2018 - 14:25 Permalink

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In reply to by Rapunzal

swmnguy Shocker Wed, 06/06/2018 - 12:43 Permalink

The jobs will come back when US workers can live on the same $5000/yr. as their counterparts in China and Mexico.

US corporations shut down their domestic manufacturing capability and switched to being importers so they could take an 85% cut in labor costs.  They didn't cut prices accordingly, of course.  They can't absorb a 6x increase in labor cost, which is what would happen if they tried to resume manufacturing in the US.

The people who used to be their manufacturing workers used to be their customers.  It's taken a little while, but now corporate interests are noticing that their customers, mysteriously to them, aren't spending as much money as they used to when they had middle-class job income.  What do you know.

And they're not now more profitable than they want to be; all that money they saved in labor they paid themselves and top shareholders, naturally.  They have to be maintained in the style to which they've become accustomed.

So either the cost of living has to drop by well over half, or consumer prices have to skyrocket, or corporate interests have to take a huge pay cut.  I don't see any of those things happening soon.

I don't see large-scale manufacturing coming back to the US without a structural crisis. 


In reply to by Shocker

PeaceLover Stuck on Zero Wed, 06/06/2018 - 10:39 Permalink

Or cost of gas the going on summer vacation can get put on slow down once you factor in the cost of filling up the tanks.

and commuting to work.. ouch.. and cost of health care?

But the stock market is up so the the world is great "right"?

And we are passing laws against questioning shooting unarmed brown kid's right.

someone said moral decay?
what the hell was he talking about the rich have 30 yr of making great income it should overflow any min now right?
Reagan said it would trickle down.. just didn't say it was going to take longer than 30 years.
Still waiting

In reply to by Stuck on Zero

scubapro PeaceLover Wed, 06/06/2018 - 11:11 Permalink


the incr in gas at the pump has taken most of any tax relief working people saw in jan/feb.   


trickle down was always in inside joke.   


moral decay?   nah just pre-facism, getting populism going again, giant dose of nationalism/patriotism (nfl players took the field in 2004 for the anthem as the nfl was/is paid by the DoD for this) prior to 2004 they were in the locker room.    militarize the police, via equip and personnel (notice how ALL police are veterans?)   digitize the currency and the pieces are all set for totalitarianism...all in the name of corporate profits and maintaining a global military presence and most imporantly Reserve Currency status. 

In reply to by PeaceLover

pissonmefico Stuck on Zero Wed, 06/06/2018 - 10:43 Permalink

Are the trade deficit numbers determined by the same people that determine the unemployment and inflation rate?

And even if the trade deficit number is correct - it means nothing - the U.S. has already fallen off the cliff - just hasn't hit the ground yet. Unplayable debt spiraling out of control, endless wars, a drugged and lied to gullible mind controlled population, a population that has had it's morality stolen, an invasion of 100 million Foreigners, 100 million Americans who could work but have lost their jobs for some reason or another, the Zionist satanic fascists who are in total control through their fiat money scam, a fake economy consisting largely of fixed markets especially equities, a house intentionally divided by the parasites responsible for it's destruction, and most of the rest of the world finally saying that's enough, we can do nicely on our own and do not need your abuse - and doing something about it.

Buy gold!

edit a typo: "unplayable" - but it works well so it remains.

In reply to by Stuck on Zero

Endgame Napoleon Stuck on Zero Wed, 06/06/2018 - 12:01 Permalink

There is something about tent-city living that just does not unleash the shopping juices for imports or Made-in-America products, but hey, I take heart in the fact that dual-earner, above-firing, womb-productive employees got a big-ol’, doubled child tax credit in the thousands to spend.

And there is also no less pay from government for sex and reproduction in the single-earner, womb-productive households of citizens and noncitizens.

When their major household bills are covered by taxpayers, and when they get bigger paychecks with less tax money extracted from their wages in the part-time jobs that keep them under the income limits for the monthly welfare programs, the progressive-tax-code windfalls for the womb productive should enable some shopping for Made-in-America goods, especially for the citizens and noncitizens with up to $6,431 in refundable child tax credits for maximum womb productivity.

Those womb producers should be able to buy some non-imported goods, which was the  intent of the Keynesian social engineers in the Republican and Democratic halves of the Uniparty CONgress when passing another tax cut for the rich and another progressive child tax credit uphike.

Only problem: Nothin’ much is Made in America anymore, and even the things that are aren’t made by US citizens and aren’t made by noncitizens, living on their wages.

It is good that Trump is getting the trade deficit down.

I just wonder if the jobs generated are going to underemployed American citizens, rather than to immigrants. Many of the immigrants in single-earner households with US-born kids get their major household bills paid by taxpayers for womb-productive sex, along with $6,431 in refundable child tax credits. 

If those jobs are going to citizens, it is very strange that the massive number of working-age American citizens out of the workforce has barely budged. 

(95 million if citizens between 16 & 18 and 60 & 65 are counted, and even if they are not counted, the number is still 50 million) 

They sure do count the 42 million womb-productive citizens and noncitizens who have so little money from their wages that they fall under the income limits for EBT as “employed.”

Looks like consultant work for foreign countries counts as an “export.”


Some of the dual-high-earner parents may be getting very large paychecks for global consultant work. Maybe, these are American citizens.

Maybe, a lot of that technical consultant work is going to high-skilled immigrants and citizens via outsourcing. 

Most of us think of “exports” as goods, but okay, services can also be an export. 

I guess the increased exports in industrial materials include steel, which is processed, requiring lots of blue-collar workers, likely mostly citizen workers.

Not sure that all “materials” for industrial production are processed as much, but maybe, they are. And maybe, US workers are getting jobs from selling the raw materials needed for industrial production  to foreign countries.

But the raw, agricultural products sold to foreign countries do not generate many jobs for US citizens since the industry does not hire many citizen workers. They hire migrants from Mexico whose major household bills are covered by government when they have womb-productive sex, enabling them to accept extremely low pay.

Maybe, the increase in food exports includes packaged goods that require workers. 

Many of the packaged, food-producing companies, like say Kellogg’s, are moving more & nore factories to Mexico, where they can pay very low wages to foreigners, while not paying into the SS retirement fund.

Is cereal Made in Mexico by an American-owned company regarded as an export or an import? 

It should be classified as an import, and they should be paying into the SS trust fund for every displaced US worker on every wage slave they hire in Mexico.

Or, just become a Mexican company and a Mexican citizen, moving your bambinos down there, subjecting your company and yourselves to their laws, while contributing to the Mexican tax base, including to any retirement fund for their elders and to their system of socialized medicine.

Not sure that American citizens are getting most of the jobs in the factories left here in the US, either, and still, food prices are not low.

For the womb-productive citizens and noncitizens, food prices are $0.00 because of their pay from the US government for womb-productive sex.

But for citizens who are not paid by government for their non-womb-productive sex—facing rent that soaks up more than half of their earned-only income—food prices are high despite all of the cheap, government-supported, foreign labor.

In states like mine, food is also taxed at 10%—while the income of our frequently vacationing, above-firing, dual-high-earner parents (“the talent”) is not taxed—albeit we have lots of “low income” single moms and illegal / legal immigrants getting their rent & groceries paid by government to reward sex, reproduction and part-time work in single-earner households.

These citizens and noncitizens are rewarded for womb-productive sex with free, non-taxed food and other freebies for not working hard so that they stay under the income limits for the pay-per-birth programs.

It is good that the rich are getting their intellectual property money.

That has a huge impact on things like breadwinner jobs for the huge pool of underemployed, male citizens that many poor, beleaguered, working mommas get paid by government to create.

The boost to wealthy intellectual property owners also helps to keep the SS trust fund solvent. Intellectual property is the big issue here, especially after the rich shipped over 2 million factory jobs—constructing the product designs of the American intellectual-property owners—to cheap-labor countries, like Asia and Mexico. 

The intellectual property owners did that, even though those jobs could have generated both full-time breadwinner jobs to enhance the overall tax base in the debt-laden USA and SS contributions right before the Boomer retirement.

It helps so much because the rich and the hardworking, so-called upper-middle-income, well-vacationed, dual-high-earner assortative mate parents—with their ten, two-week, excused babyvacations per year—only pay SS tax on up to $127,200 in income.

Maybe, the money from intellectual property will help offset the cost when they are taxed on all of their income for SS, just like the many 1099 (and other) self-employed gig workers in the USA, paying twice as much SS tax on every $50 gig as the parents who dominate the “voted best for moms” jobs. The self-employed citizens taxed for SS at 15.3%, rather than at 7.65%, are non-welfare-eligible, non-UC-eligible, mostly non-tax-credit-eligible and living on sporadic income with no benefits. 

Big Government makes sure that dual-earner parents keep two safe, above-firing, family-friendly jobs with “employer-provided” health insurance made possible by a $260-billion employer tax exclusion in one household—lavishing them with doubled, sex-and-reproduction tax credits on top of it—while the dual-high-earner parents and the welfare-consuming parents pay only 7.65% into SS up to the $127,200 cap, and most of the non-welfare-eligible, non-tax-credit-spending self-employed citizen’s pay 15.3% for SS on every dime they ever earn. 

In reply to by Stuck on Zero

STEAMO Endgame Napoleon Wed, 06/06/2018 - 13:32 Permalink

Most of that "intellectual property" sent to Mexico and Asia (along with its means of production - entire factories) was developed with tax-subsidies for corporations paid by American citizens in WWI and WWII. Nixon/Kissinger sealed the the initial deal with Mao over champagne in Beijing, and Bubba finalized it (after the Bushmen introduced golf courses to China) - while RMN de-linked the dollar from gold and re-linked it with air.

In the 1960s, our government advised us to have no more than 3 children per family because we were so overpopulated: now the UN tells us that we're so underpopulated that we need to import barbarians from the 4 corners of the planet, who need to be taught how to flick a light switch when they get here - to make 8 welfare babies per wife.

All while both parties dropped 'full employment' from their campaign planks.



In reply to by Endgame Napoleon

Oldwood dirty fingernails Wed, 06/06/2018 - 10:14 Permalink

Simply track the numbers. Shit really didn't head severely down hill till campaigning started, and mass layoffs didn't happen until Obama took the lead in polls. Which came first, what was cause and what was effect? Who can be sure.

What we do know is that economic stats do not determine if the economy goes into the shitter. If it did we would be neck deep in it now. 

Everyone knows the "progressive (Alinsky) plan" so why are you so cynical when it's suggested being perpetrated by Obama &Co.?

My belief was that businesses, when faced with both ugly numbers and the prospect of Obama Socialism as president, decided to cut their losses and save what they could until the political environment improved. As a small business I can attest that many I associate with held this opinion.

In reply to by dirty fingernails

giorgioorwell Oldwood Wed, 06/06/2018 - 10:25 Permalink

You are seriously trying to connect the financial chaos of 2008, precipitated by the collapse of Bear Stearns, AIG, and the subsequent domino effect on the entire house of cards banking system/Wall Street based largely on CDO's and a loose money Federal Reserve, on Obama's campaign?  

Bwahahahaha...seriously, not a single one of you appears to have been actually reading ZH when all of this was going down.

In reply to by Oldwood

William Dorritt Justin Case Wed, 06/06/2018 - 10:53 Permalink

China is running a bluff with a pair of deuces.

The West must stop pushing Russia into their arms, without Russia's resources at a steep discount, China has nothing other than stolen IP and tech.

Russian fuels allow Europe to decouple from the Islamic Hoard in the Middle East, other than the British Mania about keeping the long dead Czars out of the Med, so what if the Russians make a few bucks. What is going to happen, the Russians will be able to import more fresh fruit and oranges from Greece, Italy and Spain and perhaps purchase some German Beemers?

The Soviet Union was a Genocide against the Russian and Ukrainian Slavic peoples, 60-80 million exterminated.

Once all of the old timers are dead, Putin and the Legislature should pull down all of the Commie monuments in Russia and erect monuments with the name of every person exterminated by the Commies in every town.

In reply to by Justin Case