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Expand chart
Data: U.S. Dept. of Commerce; Chart: Chris Canipe/Axios

President Trump's trade war has led to even bigger trade deficits with China, even though it was intended to improve the trade balance. But it's not just China — the deficit has increased with most of our other major trade partners, too.

Why it matters: While economists agree that trade deficits aren't a good way to measure a trade relationship, they are the metric Trump fixates on, made campaign promises about and uses to evaluate relationships with other countries.

  • Throughout his campaign, Trump vowed that he would wipe away the U.S.'s trade deficits: "You will see a drop [in the trade deficit] like you’ve never seen before.”

Reality check: Among the U.S.'s 15 biggest trading partners, the trade balance has moved in the wrong direction for Trump in 10 of those countries between 2016 and 2018, while the aggregate trade deficit has jumped from $503 billion to $628B.

  • While Trump can explain the deficit spike with China as a short-term sacrifice for long-term benefit, it doesn't account for the wider trend.

The latest: The U.S. trade deficit in the first 6 months of 2019 is even bigger than in the last two years.

What's going on: Trump's tax cuts are as much to blame for the increase in the trade deficit as anything else, writes Axios Markets editor Dion Rabouin:

  • More money in Americans' pockets leads to more consumption, often of Chinese-made goods.
  • The tax cut helped boost the value of the dollar, which makes imports to the U.S. relatively cheaper.

The big picture: Trade deficits mean we buy more from a country than they buy from us, but that doesn’t necessarily mean the relationship is unfair, writes Axios business editor Dan Primack.

  • For example, you have a “trade deficit” with your local grocery: you give them money and get food in return.

Between the lines: Despite the dubious merit of the trade deficit as a useful barometer of the health of a trade relationship, Trump's obsession with the number has led to strained relations with key allies.

  • As Axios' Jonathan Swan reported in 2017, the trade deficit is one of the items he always wants to be briefed on before meeting with a foreign leader.
  • Trump picked a fight with Justin Trudeau over the trade balance, later acknowledging that he made up numbers in arguing that the U.S. has a trade deficit with Canada. It has a surplus.
  • Coupled with immigration, the trade deficit has been a major source of Trump's animus toward Mexico.
  • It led Trump to threaten auto tariffs on Europe.

Go deeper

Cedric Richmond: We won't wait on GOP for "insufficient" stimulus

Top Biden adviser Cedric Richmond told "Axios on HBO" the White House believes it has bipartisan support for a stimulus bill outside the Beltway.

  • "If our choice is to wait and go bipartisan with an insufficient package, we are not going to do that."

The big picture: The bill will likely undergo an overhaul in the Senate after House Democrats narrowly passed a stimulus bill this weekend, reports Axios' Kadia Goba.

Updated 10 mins ago - Politics & Policy

Cuomo asks for “independent” investigator into sexual harassment claims

New York Governor Andrew Cuomo at a press conference on Feb. 24. Photo: Seth Wenig/pool/AFP via Getty Images

A top aide to Gov. Andrew Cuomo said that he would authorize and "voluntarily cooperate" with an independent investigation run by New York's attorney general into claims he sexually harassed several women.

The state of play: The statement comes after a day of competing statements from Cuomo and AG Letitcia James over who would oversee an independent investigation into the governor.

Cuomo scandal snares Dems on #MeToo

Illustration: Eniola Odetunde/Axios. Photo: Ray Tamarra/Getty Images   

The searing sexual harassment allegations made against Gov. Andrew Cuomo are trouble for Democrats far beyond Albany and New York.

Why it matters: They hammered Donald Trump after the "Access Hollywood" tape. Pilloried Brett Kavanaugh over Christine Blasey Ford. Defended President Biden when he was accused of inappropriate touching. Now, Democrats have to show whether they walk the "#MeToo" talk.