Will tariffs reduce trade deficits? Experts weigh in

After his initial announcement of 25% tariffs on Mexico and Canada, Trump said the countries "have to balance out their trade" with the U.S. for him to consider not implementing those tariffs, which are currently delayed until at least March after the two countries announced border security measures.

"We have deficits with almost every country – not every country, but almost – and we're going to change it," the president added about America's broader trade deficit. Trump has also announced higher tariffs on products imported from China and is planning to impose reciprocal tariffs on foreign trading partners after a review that's expected to conclude by April 1.

In 2024, the U.S. trade deficit in goods grew by 14% in 2024 to reach a record of $1.2 trillion, while America's trade surplus in services grew 5.4% to $293 billion – leading to a net trade deficit for goods and services of $918 billion last year, up $133 billion from the prior year. With the trade deficit growing and the president aiming to narrow it, FOX Business spoke with expert economists about whether trade deficits are a problem that tariffs can fix.

Ryan Young, senior economist at the Competitive Enterprise Institute, told FOX Business that people buying goods and services from overseas is because they "value what they get more than the money they give up."