Economist Peter Schiff has a message for anyone who thought tariffs would shrink America's trade gap: look at the numbers. The advance U.S. goods-trade deficit unexpectedly widened in September, and Schiff is calling President Donald Trump's tariff policies a "complete failure."
In a post on X on Wednesday, Schiff described September's goods-trade deficit as one of the largest on record and noted that the only larger shortfalls occurred during Trump's presidency in 2025. He presented the latest figure as evidence that tariffs have not delivered their stated manufacturing or trade objectives.
The economist argued that the U.S. is importing more goods than ever, remains increasingly reliant on foreign producers, and is paying Trump's tariffs on those imports.
“The tariffs have been a complete failure,” wrote Schiff. He also questioned, “if the economy is booming as Republicans claim, why have our trade deficits gone way up?”
Schiff argued that, compared with former President Joe Biden's final two years in office, Trump's first two years have seen slower GDP growth and job creation, higher inflation, and larger budget and trade deficits. He contended that, by Trump's own criticism of Biden's economic record, these comparisons undermine Trump's claims about the economy.
“Trump economy is now the worst economy in history,” he said.
Rand Paul Calls Tariffs a Tax
Sen. Rand Paul (R-Ky.) made a related point, arguing that tariffs are taxes paid by American farmers, manufacturers, and consumers, not by China or Canada. He opposed blanket tariffs and advocated free and fair trade that benefits all Americans.
“A tariff is a tax. China or Canada doesn't pay it. Farmers, American manufacturers, and families at the checkout counter pay it,” Paul wrote on X. “I oppose blanket tariffs and support free, fair trade that benefits every American.”
Record Imports Drive the Deficit Wider
On Wednesday, the Commerce Department released its Advance Economic Indicators Report, showing the U.S. goods trade deficit unexpectedly widened 2.1% to $134.9 billion in September, the largest since March 2025. The driver: imports surged to a record $344.1 billion. Imports of capital goods jumped 7.5% month over month and 77.2% year over year, driven partly by demand tied to the AI infrastructure buildout.
Goods exports rose 2.6% to $209.2 billion in September, led by a 12.8% increase in food shipments. Capital goods exports climbed 5.4%, and consumer goods exports rose 6.5%. However, motor vehicle and industrial supplies exports declined. Imports of consumer goods increased 3.1%, while industrial supplies imports fell 6%.
Economist Daniel Vielhaber told Reuters that the widening trade deficit may weigh on third-quarter GDP, but reflects strength in the U.S. economy, driven by sustained business investment and consumer spending.
So there you have it: a record trade gap that Schiff reads as proof tariffs failed, and an economist who reads it as a sign of domestic strength. Both can be true at once, which is the fun part about trade data. The deficit is a headline number, but what's inside it matters. A surge in capital goods imports tied to AI infrastructure is not exactly the same as a surge in consumer goods from abroad. Still, for Schiff, the bottom line is simple: the tariffs were supposed to fix this, and they haven't.
