Peter Schiff Says Trump’s ‘Rhetoric’ Aside, Tariffs Haven’t Reduced US Trade Deficit: ‘More Reliant Than Ever’ on Rest of the World

Economist Peter Schiff on Tuesday criticized President Donald Trump‘s trade policies after the U.S. trade deficit widened 42% in May, the largest monthly gap since March 2025.

Schiff Says Tariffs Have Failed To Narrow Trade Gap

Schiff, in a post on X, said the latest trade data showed the U.S. remained heavily dependent on imports despite Trump’s tariffs aimed at narrowing the trade gap.

“For all Trump’s rhetoric and tariffs meant to reduce our trade deficits, we are more reliant than ever on the rest of the world to produce what we consume and lend us the money to buy it,” he added.

Imports Hit 14-Month High As Exports Decline

The country’s trade deficit rose from a revised $54.6 billion in April to $77.6 billion in May as imports climbed 3.3% to $395.3 billion while exports fell 3.2%.

The increase was driven by a wider goods trade deficit, which expanded to $106.5 billion as imports of consumer goods and capital goods, including electronics and semiconductors, rose.

Capital goods imports reached a record high on the back of continued business spending on artificial intelligence infrastructure.

“From a GDP accounting perspective for the second quarter, the wider trade gap looks likely to ‘subtract’ about 1.7 percentage points from second-quarter real GDP growth,” chief economic advisor at Brean Capital John Ryding told Reuters.

Trade Deficit Fits Schiff’s Long-Running Thesis

Since returning to office, Trump has expanded tariffs on imports, in an effort to narrow the U.S. trade deficit and revive American manufacturing.

Schiff had earlier warned that the U.S. consumes more than it produces and depends on foreign creditors to finance that imbalance.

In June, he said that the economy was “a house of cards” and described the Treasury as “a giant Ponzi,” as rising debt and reliance on overseas financing would eventually become unsustainable.

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