Key facts
- US goods trade deficit was $130 billion in August.
- Foreign direct investment inflows fell 8.2% to $248 billion in 2025.
- US outstanding debt is $40 trillion.
A study by the German Economic Institute (IW) indicates that while President Donald Trump's economic policies fostered growth and investment, they did not reduce the US trade deficit. The report, seen by Reuters, noted that the US goods trade deficit hit $130 billion in August, surpassing levels from two years prior despite the implementation of sweeping import tariffs. Trade patterns have shifted, with the EU's and China's shares of the deficit declining. Efforts to reshore manufacturing have also fallen short, as evidenced by a decrease in foreign direct investment inflows. The ongoing US-Israeli war against Iran is further exacerbating public debt and interest rates, raising concerns about the US's ability to manage its $40 trillion in outstanding debt.