Tariffs Are Bringing Down the Trade Deficit While Allowing the AI Boom to Continue
\n\nAmerica’s trade deficit narrowed unexpectedly in September, and the gap through the first nine months of the year was 12.2 percent smaller than a year earlier. President Donald Trump’s trade policies appear to be doing exactly what critics said they could not: shrinking the trade deficit.
\n\nThe Commerce Department reported Wednesday that the deficit fell 0.7 percent to $105 billion, below the $108 billion economists expected. Exports increased 1.9 percent, outpacing a 1.2 percent rise in imports. Through September, the deficit was $92.4 billion smaller than during the same period last year.
\n\nThat improvement came despite another enormous increase in purchases of equipment for America’s artificial intelligence buildout. Computer imports jumped $7.6 billion in September, while computer accessories rose $5.7 billion. Capital-goods imports overall increased $11.6 billion.
\n\nThose purchases explain why the headline deficit conceals a much bigger improvement elsewhere.
\n\nOn Wednesday, Harvard economist Jason Furman posted charts on X that make the distinction unusually clear.
\n\nThe latest trade data takes us through September. It shows that the overall trade deficit amounted to around 2.7 percent of gross domestic product. That compares with 2.9 percent in…
Original source: https://www.breitbart.com/economy/
