President Trump's tariffs, aimed at reducing trade deficits, exclusively apply to goods, neglecting the robust service sector contributing significantly to the US economy. Services account for over two-thirds of the economy and generate a substantial trade surplus, with a reported $293 billion surplus in services compared to a $1.2 trillion deficit in goods in 2024. The exclusion of the services sector from tariff calculations could suggest a missed opportunity to enhance trade negotiations and economic balances with major partners like the UK and Canada.
Thereâs something missing from President Donald Trumpâs 'reciprocal' tariffs: services. His tariffs only apply to goods imported into the US, overlooking the sector worth about $8.8 trillion globally.
The US trade surplus in services was $293 billion in 2024, in stark contrast to the $1.2 trillion trade deficit in goods, Bureau of Economic Analysis data shows.
If services had been factored in, the major economies the US exports services to would have faced lower tariffs, allowing for a more balanced trade approach.
Although services are not subject to tariffs, they are subject to trade barriers such as nationality and local presence requirements that severely limit the service sector.
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