Donald Trump lauds ‘Liberation Day’ tariffs, says trade deficit contracted 78% ahead of official data release

Former U.S. President Donald Trump has attributed a significant reduction in the U.S. trade deficit, claiming it has contracted by 78% as a result of tariffs he implemented during his administration. Trump expressed optimism that the trade balance could potentially turn positive in the coming year. However, a review of 2025 data indicates that despite a decrease in imports from China, the trade deficit persists. A study conducted by the Federal Reserve highlights that the brunt of the tariff costs has largely fallen on American businesses and consumers, rather than on foreign exporters. This raises questions about the effectiveness of the tariffs in achieving their intended economic objectives. As the U.S. approaches the release of official trade data, the implications of these tariffs on the broader economy and trade relationships are under scrutiny, particularly in light of ongoing debates about trade policies and their impact on domestic markets.