May 7, 2026 | Press Release
For Immediate Release: May 7, 2026
Press Contact: Allie Gross, agross@economicliberties.us
Manufactured Goods Trade Deficit Up Compared to Pre-Trump Even as Overall Deficit Declines, Industrial Employment Down, U.S.-Produced Goods Shipments Show a Positive Trend
WASHINGTON, D.C. – Rethink Trade today published an infographic webpage compiling trade and manufacturing data now available for Q1 2026 that show President Trump’s actions on trade have not delivered on his promises to quickly balance trade and revitalize U.S. manufacturing.
Candidate Donald Trump rode the working-class vote back into the White House with promises that tariffs would speedily rebalance U.S. trade and rebuild American manufacturing. His presidential trade policy communications since, including the April 2 “Liberation Day” tariffs announcement when he said manufacturing and jobs would be “roaring back,” reiterated his goals were boosting U.S. manufacturing and industrial jobs and reducing the U.S. trade deficit. In November 2025, Treasury Secretary Scott Bessent predicted 2026 would be a “blockbuster” year for the U.S. economy, including a manufacturing comeback.
With Q1 2026 U.S. government data now available for several trade and manufacturing industry indicators, we can report the trade data show an increase in the U.S. manufactured goods trade deficit relative to pre-Trump in Q1 2024. The United States also lost 82,000 manufacturing jobs since Trump’s return to office. U.S. construction spending in manufacturing is down 20.5% since Trump’s inauguration. The overall U.S. trade deficits in both goods and goods and services have decreased since 2024, but gains in exports are mostly unrelated to manufacturing. However, other measures of manufacturing activity present a more nuanced picture: Shipments of U.S.-produced durable goods grew consistently (albeit modestly) throughout 2025 and continued to rise slowly in Q1 2026, and Manufacturing Purchasing Managers Indexes are positive.
“The first-quarter 2026 data show President Trump’s promises to prioritize speedily cutting the trade deficit and create more American manufacturing jobs are getting undermined by his chaotic and often mistargeted use of tariffs and squandering of leverage to demand other countries gut their Big Tech anti-monopoly and other policies instead of mercantilist abuses fueling the trade deficit,” said Lori Wallach, Director of the Rethink Trade program at the American Economic Liberties Project.
Key findings:
- Manufacturing employment is down 82,000 jobs between January 2025, when Trump was inaugurated for his second term, and March 2026.
- The inflation-adjusted U.S. trade deficit in manufactured goods was 0.75% larger in Q1 2026 than Q1 2024. (The U.S. trade deficit in manufactured goods was 4.4% or $63 billion larger in 2025, the first year of Trump’s second term, than 2024.)
- The U.S. global goods and services trade deficit in Q1 2026 was 56% smaller than Q1 2025 and 18% smaller than Q1 2024. Most of this decrease is due to a reduction in the goods trade deficit.
- The reduction of the goods trade deficit was likely driven by increased exports of gold, civilian aircraft, and liquefied natural gases.
- Imports from Taiwan increased 177% comparing Q1 2026 with Q1 2024 data. More than half of the United States’ imports from Taiwan were certain digital processing units, likely related to expanding AI infrastructure.
- U.S. construction spending in manufacturing was down 20.5% comparing March 2026 to January 2025.
- U.S. manufacturers’ durable goods shipments were up by 4.4% in Q1 2026 compared to Q1 2025.
- U.S. manufacturers’ nondefense capital goods shipments excluding aircraft were up by 3.4% in Q1 2026 compared to Q1 2025.
- The U.S. Manufacturing Purchasing Managers Index issued by the Institute of Supply Management Report on Business was up in Q1 2026 after declining for most of 2025.
See the webpage with trade and manufacturing data in full here.
Rethink Trade is a program of the American Economic Liberties Project.
Learn more about Economic Liberties and Rethink Trade.
The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.