Analysis: These two new economic numbers blew a hole in Trump’s rosy narrative
By
Daniel Dale
A vessel passes a container ship loaded with shipping containers at the Port of Los Angeles on February 20, 2026. Mario Tama/Getty Images
Two new pieces of economic data, one released Thursday and one released Friday, blew another hole in President Donald Trump’s triumphant narrative about the effects of his tariffs.
The figures released early Thursday showed Trump had wildly overstated the impact of the tariffs on the trade deficit. The figures released early Friday showed he also had wildly exaggerated economic growth in the fourth quarter of 2025.
The Supreme Court struck down many of Trump’s tariffs later on Friday. But other tariffs remain in place, and Trump quickly said he plans to replace the ones the court declared illegal with new tariffs under a different law.
The trade deficit was down 0.2% in 2025, not down ‘78%’
Trump has for years highlighted the trade deficit – the difference between the value of US imports and exports – as a supposed example of how the US is being “ripped off” by other countries. (Many economists disagree with his characterization.) On Wednesday evening, he posted a celebratory message on social media.
“THE UNITED STATES TRADE DEFICIT HAS BEEN REDUCED BY 78% BECAUSE OF THE TARIFFS BEING CHARGED TO OTHER COMPANIES AND COUNTRIES,” the all-caps post began.
The next morning, though, the Bureau of Economic Analysis revealed the actual 2025 trade deficit in goods and services. It was nearly identical to the 2024 deficit, down just 0.2% — nowhere close to Trump’s professed “78%” decline. And the trade deficit in goods, the items subject to Trump’s sweeping global tariffs, was up 2.1% compared to 2024.
Trump didn’t make up the “78%” figure out of thin air, but it was still deceptive. He was citing an out-of-date and short-term number from October 2025, when the trade deficit was 78% lower than it was in January 2025. Experts cautioned at the time that the sharp October drop would be fleeting, the result of temporary fluctuations in gold and pharmaceuticals trade, and it was.
Trump’s Wednesday post was also inaccurate in suggesting his tariffs are paid by foreign countries. Tariff payments are made by US importers, not foreign exporters, and those importers often pass on some of their costs to consumers. While foreign exporters may sometimes drop their prices to try to keep their products competitive, various analyses have found that the overwhelming majority of the costs of the tariffs Trump has imposed this term are being covered by a combination of US businesses and US consumers.
Economic growth in fourth-quarter 2025 was 1.4%, not ‘5.6%’
The Bureau of Economic Analysis on Friday released another key set of figures — estimates on real gross domestic product (GDP) growth. These figures, too, were far from the number Trump had been touting.
Trump told the World Economic Forum in late January that “fourth-quarter growth is projected to be 5.4%, far greater than anybody other than myself and a few others had predicted.” He specified in a Cabinet meeting and a Wall Street Journal op-ed later in January that he was referring to a projection for the fourth quarter of 2025 from a model run by the Federal Reserve Bank of Atlanta. Then, in an early-February interview with NBC, he made it sound like 5.6% growth had already been achieved, saying, “I’m very proud of it: 5.6%. You know, we have a GDP of 5.6 despite a shutdown.”
By the time of the op-ed, the Cabinet meeting and the interview, though, the Atlanta Fed’s model was down to a projection of 4.2% fourth-quarter 2025 growth. Various other forecasts were even lower than that. And contrary to Trump’s comment to NBC, forecasts aren’t reality.
The figures released Friday show just how far from reality his “5.6%” claim was. The economy actually grew at an annualized rate of just 1.4% in the fourth quarter of 2025, much slower than the 4.4% growth in the third quarter of 2025.
The fall government shutdown was a significant factor in the weak figure. Still, Trump claimed growth was 5.6% despite the shutdown, which wasn’t close to correct.
And what of Trump’s vague claim from a speech on the economy Thursday in Georgia, that “our country was dead” a year ago under former President Joe Biden, but “now we have the hottest country”? The US economy grew at just 2.2% in 2025, new full-year figures showed — lower than in every year of the Biden administration and every year of the first Trump administration other than 2020, when the Covid-19 pandemic hit.
https://www.cnn.com/2026/02/21/politics/economy-gdp-trade-deficit-trump-tariffs
