On February 18, 2026, President Donald Trump claimed on Truth Social that the U.S. trade deficit has been reduced by 78% as a direct result of his administration’s tariff policies. He further predicted that the U.S. will enter “positive territory” (a trade surplus) in 2026 for the first time in nearly 50 years.
Trump Claims 78% Drop in U.S. Trade Deficit: Fact-Checking the “Liberation Day” Tariffs
The Core Claim
In an all-caps post, President Trump stated:
“THE UNITED STATES TRADE DEFICIT HAS BEEN REDUCED BY 78% BECAUSE OF THE TARIFFS BEING CHARGED TO OTHER COMPANIES AND COUNTRIES. IT WILL GO INTO POSITIVE TERRITORY DURING THIS YEAR [2026].”
The Data: What the Numbers Actually Say
While the “78%” figure matches a specific recent window, the broader economic picture shows intense volatility:
- The 80% Drop: Official government data confirms that the goods and services trade deficit narrowed from a record $140.5 billion in March 2025 to $27.62 billion in October 2025—a sharp decline of roughly 80%.
- The November Rebound: However, the deficit widened again in November 2025, climbing to $56.8 billion (a nearly 95% month-over-month increase) as imports surged.
- The 2025 Total: Despite the monthly dips, the U.S. is on track to post a total trade deficit exceeding $800 billion for 2025, which is lower than the record $1.2 trillion in 2024 but still significantly high.
The “Surplus” Prediction for 2026
Trump’s comments come just ahead of the December 2025 trade data release (scheduled for today, February 19, 2026).
- Analyst Projections: Economists expect the December report to show a $55.5 billion surplus, which would mark the first monthly trade surplus for the United States since 1975.
- Revenue Impact: U.S. Treasury data shows tariff revenues reached $124 billion as of January 2026, a 304% increase over the previous year.
Impact of “Liberation Day” Tariffs (April 2025)
The “Liberation Day” tariffs, introduced on April 2, 2025, placed reciprocal duties of 10% to 50% on imports from over 100 countries.
| Metric | Pre-Tariff (2024 Avg) | Post-Tariff (Oct 2025) |
| Monthly Deficit | ~$100 Billion | $27.6 Billion |
| China Import Value | $401 Billion (Jan-Nov) | $288 Billion (Jan-Nov 2025) |
| Effective Tariff Rate | ~2.5% | ~17% (Highest since 1932) |
Expert Analysis: Volatility vs. Victory
Economists warn that the “78% reduction” may be influenced by temporary factors:
- The “Gold” Effect: A significant portion of the October deficit narrowing was attributed to massive fluctuations in the trade of non-monetary gold.
- The “Front-Loading” Surge: The massive deficit in early 2025 was caused by businesses “front-loading” or stockpiling goods to beat the April tariff deadline.
- Cost Shift: A Federal Reserve study suggests that 90% of the tariff costs in 2025 were borne by American businesses and consumers, though foreign exporters began absorbing more of the burden toward the end of the year.
Key Takeaway for Businesses
As the U.S. approaches its first potential monthly surplus in decades, markets remain on high alert. The Supreme Court is expected to rule shortly on the legality of using the 1970s emergency law to enact these tariffs, a decision that could determine if these trade shifts are permanent or a temporary shock to the global system.
