Trump's economic team adopts a narrow perspective on foreign trade, focusing solely on the exported and imported figures for the US. This leads them to conclude that the US is a "loser" in global trade. In contrast, US companies have a broader perspective, as they consider their international sales from domestic operations but also the sales from overseas operations. With this comprehensive view, US companies are a "winner" in global trade.
Global trade offers numerous advantages, with the primary ones being the capability to sell and manufacture in various international markets. Simply put, it broadens growth prospects for businesses.
Trump's economic team only looks at one aspect of the global trade picture. In 2024, U.S. imports amounted to $4.1 trillion, leading to a trade deficit of $918 billion, one of highest ever recorded. From this perspective, the Trump team deduces that the U.S. is being exploited and is losing in global trade.
However, the global trade landscape is far more complex. For instance, US multinational companies function on a global scale, allowing them to manufacture and sell in various international markets. According to the most recent 2022 report on US multinationals, the gross sales of their majority-owned foreign affiliates exceeded $9 trillion. This sales figure is about half of the parent companies' sales figures in the US. It is also more than twice the value of US imports in a typical year.
Does it make sense to limit imports into the US at the risk of losing access to the international markets where US companies manufacture and sell? Common sense suggest that global markets, which provide over $9 trillion in sales, are far more important and lucrative for US companies than the $4 trillion in imports. Foreign nations will not remain passive and allow US companies to operate freely in their markets while the US imposes tariffs or restrictions on their businesses.
Trump's economic team needs to reconsider their trade strategy, as fully implementing Trump's tariff plan could significantly reduce the global market available to US businesses. At present, US companies are "winners" in international trade, but they might swiftly become "losers" under Trump's trade approach.