The Monthly Trade Deficit Drops to a 16 Year Low
Tariffs almost certainly played a role, but it hasn’t translated into new manufacturing jobs. The U.S. trade deficit in goods and services shrank to $29.4 billion in October, down from $48.1 billion in September, according to data released by the […]
machineryasia 
Tariffs almost certainly played a role, but it hasn’t translated into new manufacturing jobs.
The U.S. trade deficit in goods and services shrank to $29.4 billion in October, down from $48.1 billion in September, according to data released by the U.S. Department of Commerce on Thursday.
It was not expected. Economists polled by Reuters had forecast the trade deficit rising to $58.9 billion.
Instead, it was the lowest monthly trade deficit figure recorded since June 2009, notes the New York Times. While trade flows have fluctuated this year as companies have stockpiled imports ahead of rate increases, the fact of the matter is U.S. imports have fallen while exports have not. That’s been a major goal of President Trump’s and is likely a result of his administration’s use of tariffs to reshape global trade flows.
What It has not so far translated into is more U.S. manufacturing jobs. Data released by the U.S. Bureau of Labor Statistics Friday morning showed 8,000 were lost in December, continuing a downward trend that stretches back to February 2023. Still, there are a lot of factors that suggest they’ll finally start ticking up this year, not least among them being more certainty around tariff rates. And that could come any moment, as the U.S. Supreme Court is expected to shortly announce its decision regarding the legality of the tariffs imposed by Trump under the International Emergency Economic Powers Act; they formed the basis for the “reciprocal” tariffs announced in April 2025.
Whether they stay or go will certainly affect the monthly trade deficit, which, while at a 15 year low, was still almost $30 billion. That’s still high and that still matters. As we’ve argued before: Goods trade deficits that have grown steadily over the past 40 years have hollowed out U.S. manufacturing, closed factories, and triggered job losses. They have impeded the establishment of critical supply chains and hamper our ability to scale up important emerging manufacturing industries. They represent the erosion of our industrial base and continuing to tolerate it is an economic and security mistake.
