Tariffs and Their Original Purpose
The idea behind tariffs was to reduce the trade deficit of the United States. These tariffs were meant to balance trade and protect the economy. But instead of solving the problem, the situation has gone in the opposite direction.
Rising Deficit Numbers
In the first seven months of 2025, the U.S. trade deficit has reached $654 billion.
This is a big jump of 31% compared to $500 billion during the same period in 2024. Instead of shrinking, the deficit has only grown larger, showing that the plan has not worked as expected.
The Reverse Effect of Tariffs
The policy that was supposed to control the trade gap has actually made things worse. Rather than reducing the deficit, the tariffs have contributed to its ballooning. This has raised concerns about the strength and direction of U.S. trade policy going forward.
Debt Levels Adding More Pressure
Along with the rising deficit, debt levels in the U.S. are also moving higher. In just the first few months of 2025, the national debt has increased by a couple of trillion dollars. This kind of borrowing is clearly unsustainable and puts extra pressure on the economy.
Signals from the Gold Market
The gold market is also reflecting these issues. Gold prices often rise when there is economic stress or doubts about sustainability. The recent moves in gold show that investors are aware of the rising risks in the U.S. trade and debt situation.
A Situation That Cannot Last
The combination of growing deficit and rising debt shows a path that cannot continue for long. At some point, this trend will have to stop. The system is under stress, and the imbalance between tariffs, trade deficit, and debt is becoming too large to ignore.
