Trump's economic agenda report card is mixed! Growth and investment are strong, but the trade deficit remains difficult to resolve, and the results of reshoring manufacturing have fallen short of expectations.

Title context: Trump's economic agenda report card is mixed! Growth and investment are strong, but the trade deficit remains difficult to resolve, and the results of reshoring manufacturing have fallen short of expectations. Text: A study by the German Economic Institute (IW) shows that while US President Trump's economic agenda has promoted steady economic growth and strong investment, it has failed to reduce the trade deficit. The Trump administration has sought to reshape the US economic structure, reverse long-term trade imbalances, and reduce America's dependence on overseas supply chains through measures such as tax cuts, additional tariffs, attracting corporate investment, and promoting the reshoring of manufacturing. However, judging from current economic performance, the actual effects of these policies remain clearly mixed. The report points out that Trump's tax cut policies, tariff measures, and efforts to promote the reshoring of manufacturing to the United States have produced mixed results. US gross domestic product (GDP) has maintained steady growth, and investment related to artificial intelligence (AI) has also performed strongly, but the pace of job creation has lagged behind that during the previous administration, and the inflation rate remains above the Federal Reserve's 2% target. The report also writes that despite the implementation of broad import tariffs, the US goods trade deficit still reached US$130 billion in August, higher than the level two years ago. However, the trade landscape has already changed. The European Union's share of the US trade deficit fell from 20% in August 2024 to 7%, while China's share of the US trade deficit fell from 29% to 14%. Efforts to promote the reshoring of manufacturing to the United States have so far failed to meet expectations. In 2025, foreign direct investment inflows into the United States fell 8.2% to US$248 billion, 18% below the average level from 2015 to 2024. In addition, the war launched by the United States and Israel against Iran is exacerbating America's already high public debt and pushing up interest rates. Creditors have begun to question whether the United States is capable of sustaining its outstanding debt of as much as US$40 trillion. Tariff policy reshapes the trade landscape, but fails to reverse the overall trade imbalance Trump has used tariffs as one of the core tools of his economic agenda, seeking to protect US domestic industries, encourage companies to move production to the United States, and pressure trading partners to readjust their trade relations with the United States by raising the cost of imported goods. The policy logic is to use tariffs to increase the cost of overseas production and exports to the United States, thereby enhancing the competitiveness of US domestic manufacturing, while using US market access as a bargaining chip to push trading partners to make concessions. Under this policy framework, the Trump administration has expanded the coverage of tariff measures and linked tariffs with national security, supply chain security, and industrial policy. In addition to imposing tariff measures on different trading partners, the US government has also included strategic industries such as semiconductors in its key focus, attempting to promote the establishment of production capacity for related industrial chains within the United States through import restrictions and tariff arrangements. For example, in January 2026, the Trump administration announced a 25% tariff on certain advanced computing chips and related products, but at the same time set exemption arrangements for imports used in US data centers, research and development activities, and other products that help strengthen the US domestic technology supply chain. This policy reflects the US government's attempt to strike a balance between restricting certain imports, supporting domestic manufacturing capacity, and meeting the needs of the domestic technology industry. However, tariff policy does not necessarily lead to a narrowing of the overall US trade deficit. On the one hand, companies may adjust supply chains by shifting procurement and production to other countries rather than directly moving manufacturing back to the United States; on the other hand, the United States still has substantial demand for overseas goods and intermediate products, especially in areas where domestic production capacity is not yet sufficient. Therefore, even if imports from specific countries or regions decline, the United States may switch to importing from other economies, and the sources of the trade deficit may change accordingly, but the overall scale may not necessarily decline in tandem. At the same time, tariffs may also push up corporate procurement costs. For US manufacturers that rely on imported raw materials, components, and equipment, tariffs increase input costs. Companies may pass part of the costs on to consumers by raising product prices, or they may compress profit margins or postpone investment plans. If companies cannot determine future tariff levels and the direction of trade policy, they may also delay long-term capital expenditure and supply chain adjustment decisions. Despite the implementation of broad import tariffs, the US goods trade deficit still reached US$130 billion in August, higher than the level two years ago. However, the trade landscape has already changed. The European Union's share of the US trade deficit fell from 20% in August 2024 to 7%, while China's share of the US trade deficit fell from 29% to 14%. This shows that tariff measures have indeed changed the structure of US trade sources, but have not yet eliminated the overall US goods trade imbalance. Manufacturing reshoring policy continues to advance, but investment commitments have not yet been fully converted into actual production capacity Promoting the reshoring of manufacturing is another important pillar of Trump's economic agenda. The Trump administration believes that globalization and industrial relocation over the past decades have weakened the US manufacturing base and left the United States overly dependent on overseas production in key products and supply chain links. Therefore, the government hopes to attract companies to build new factories in the United States, expand production scale, and move part of the production links originally located overseas back to the United States through means such as tariff protection, tax incentives, investment negotiations, and industrial support. In terms of specific measures, the Trump administration, on the one hand, uses tariffs to raise the cost for companies producing overseas and then exporting to the United States, prompting companies to reassess their production layouts; on the other hand, it seeks more capital inflows into US manufacturing, technology, and infrastructure sectors through investment arrangements with large multinational companies and foreign governments. The semiconductor industry is one of the priorities of this strategy. The US government hopes to use policy support and investment commitments to expand domestic chip manufacturing and related supply chain capacity. TSMC previously announced that it would invest up to US$165 billion in the United States, involving projects such as chip manufacturing plants, advanced packaging facilities, and research and development centers. In addition, Apple also announced a plan to invest US$600 billion in the United States over the next four years, one of the goals of which is to strengthen the US domestic silicon supply chain. General Electric committed to invest about US$3 billion to move part of its production layout from China and Mexico to the United States. These investment plans reflect that the US government is trying to rebuild the domestic manufacturing ecosystem through corporate capital expenditure and foreign direct investment. However, there is a clear difference between investment commitments and actual capital inflows, factory construction, and newly added production capacity. The investment scale announced by some companies may include projects already announced previously, routine operating expenses, or long-term plans that have not yet been implemented, and does not mean that all funds will be immediately invested within the United States. In addition, manufacturing projects usually take years from investment decision to factory completion and production. Companies must also comprehensively consider factors such as labor costs, energy supply, infrastructure conditions, raw material prices, and future policy stability. If tariff policies are adjusted frequently, companies may find it difficult to accurately assess long-term investment returns, and may instead postpone factory construction and expansion plans. US manufacturing also faces real cost constraints. Compared with some overseas production bases, US labor costs are higher, and tariffs pushing up the prices of imported components and raw materials may also increase the cost of production within the United States. For companies that need to rely on global supply chains, tariff protection alone may not be enough to offset the cost disadvantages of domestic US production. Therefore, promoting the reshoring of manufacturing is not simply about moving overseas factories back to the United States, but requires simultaneously building supporting supply chains, cultivating skilled labor, improving infrastructure, and ensuring that companies can obtain stable policy expectations over a longer period. Even if companies have already announced investment plans, new factories may not necessarily a significant increase in employment growth and manufacturing output in the short term. Efforts to promote the reshoring of manufacturing to the United States have so far failed to meet expectations. In 2025, foreign direct investment inflows into the United States fell 8.2% to US$248 billion, 18% below the average level from 2015 to 2024. This means that although the Trump administration actively promotes large corporate investment commitments and seeks to attract capital back through tariffs and policy incentives, actual foreign capital inflows have not grown in tandem. Changes in trade structure and US fiscal pressure further test the long-term effectiveness of the economic agenda From a broader economic perspective, the Trump administration's policies also face a complex relationship among trade structure, corporate investment, and fiscal conditions. The US goods trade deficit has long been affected by multiple factors such as domestic consumer demand, the savings and investment structure, the dollar exchange rate, and the global supply chain division of labor. Tariffs can change the prices and sources of imported goods, but it is difficult for them alone to address the deeper factors that determine the overall trade imbalance. At the same time, there is also a certain policy tension between tariffs and manufacturing reshoring policy. The government hopes to encourage companies to produce in the United States by raising import costs, but if the prices of imported components, equipment, and raw materials rise in tandem, the cost for companies to build domestic factories may also increase accordingly. Coupled with the uncertainty of policy adjustments, some companies may choose to shift production to other low-cost countries rather than directly moving it back to the United States. The war launched by the United States and Israel against Iran is exacerbating America's already high public debt and pushing up interest rates. Creditors have begun to question whether the United States is capable of sustaining its outstanding debt of as much as US$40 trillion. Higher interest rates mean that the US government may face higher interest expenses when financing new debt and refinancing existing debt. At the same time, corporate financing costs and household borrowing costs may also be affected, thereby putting pressure on manufacturing investment, the real estate market, and consumer demand. If the fiscal deficit continues to expand, market concerns about US debt sustainability may further affect Treasury yields and financial market risk pricing. Overall, the Trump administration is trying to use tariffs, tax cuts, and manufacturing reshoring policies to push the US economy away from dependence on global supply chains toward greater emphasis on domestic production and industrial security. At this stage, these policies have already affected the structure of US trade sources and corporate investment layouts, and AI-related investment has also provided support for economic growth. But the trade deficit remains high, foreign capital inflows have declined, manufacturing reshoring has not yet been fully converted into new production capacity and employment, and high public debt and interest rate pressure have added to macroeconomic uncertainty. This means that evaluating the actual effectiveness of Trump's economic agenda cannot rely solely on the scale of tariffs or the investment commitments announced by companies; it is also necessary to observe whether US manufacturing employment, actual capital expenditure, industrial output, foreign capital inflows, and the overall trade deficit can continue to improve. Whether the above indicators can show substantive changes in the period ahead will determine whether the Trump administration's policy goals of promoting a US manufacturing revival and reshaping the trade landscape can truly be achieved.