Economist bursts into laughter when asked about Trump's failed tariffs — sadly data reinforces that Canadians are paying the price

CBC HOST: The Commerce Department just released data showing the U.S. trade deficit in goods hit a record high in 2025, even after a year of aggressive tariffs from the Trump administration. Justin Wolfers, as an economist, what's your reaction?

WOLFERS: [laughs] Hahahahahahahahahahaha ... hahahahahahahaha ... hahahahahahahahahaha ... oh, wow.

And it was during those few seconds of audible disbelief that Wolfers composed himself and offered what may be the most efficient economic summary of the year: A Ph.D. isn’t required to reach a conclusion.

“If the trade deficit this year is bigger than it was last year, and this year we have high tariffs in a trade war, and last year we didn't, I guess it doesn't require a lot of fancy statistics to infer that Trump's tariffs didn't help the trade deficit.”

What the U.S. data shows — and tells

The new data, released February 19, 2026 by the U.S. Commerce Department, confirmed what most economists had been predicting since day one: Trump's trade war did not shrink the U.S. trade deficit. In fact, the U.S. goods trade deficit hit a record US$1.24 trillion (C$1.37 trillion) in 2025 — a 2% increase from the prior year — even as sweeping double-digit tariffs were applied to imports from Canada, Mexico, China and dozens of other trading partners.

As a result, the overall U.S. trade deficit (goods and services combined) came in at US$901 billion (C$1.23 trillion)— the third-highest on record — barely moving away from the 2024 trade deficit of US$904 billion (C$1.24 trillion).

The U.S. trade tariffs were criticized from the start

As one of the most widely cited voices on trade policy in North America, Wolfers boldly criticized Trump’s tariffs right from the start.

In March 2025, he told MSNBC there is 'not an economist alive' who would defend the Trump administration's approach to tariffs (2).

Almost a year later — and with the recent release of federal trade deficit data — Wolfers’s statement continues to reflect poorly on the White House and for everyone who believed in Trump’s tariff approach.

Rather than course-correct, U.S administration suggests censoring analysts

In response to the release of the federal data, the top economic adviser for the Trump administration, National Economic Council director Kevin Hassett, called for Federal Reserve researchers to be 'disciplined' after they published findings showing 90% of the tariff burden is being absorbed by U.S. businesses and consumers — not by foreign exporters (3).

Wolfers publicly criticized Hassett’s reaction, calling it an attempt to suppress inconvenient economic truth (4). He wasn’t the only economist to speak out. According to Steve Benen (5), a producer for the Rachel Maddow Show and editor of MaddowBlog:

“Paul Krugman released a related video on the subject (6), making a compelling case that Hassett’s call to discipline economists was “thuggish.” Krugman added, “That’s incredible. That’s like saying, ‘If you carefully study the data and come up with results that we in the Trump administration don’t like, we will punish you personally — or we will try to.”

Impact of someone else’s trade war on Canadians

Even though Canada didn't launch this trade war, the sad fact is Canadians are paying for it.

Statistics Canada data released the same week as U.S. data showed Canada's own trade deficit widened to C$31.3 billion in 2025 — the largest annual shortfall on record outside of the COVID-19 pandemic (7).

Canadian exports to the U.S. fell 5.8% over the year as American tariffs took their toll on sectors that employ hundreds of thousands of Canadians, including auto manufacturing, energy, agriculture, lumber and steel.

At the same time, Canadian retaliatory tariffs — applied to billions of dollars' worth of American goods — pushed up prices on imported products that Canadians rely on daily, such as food, appliances, furniture and consumer electronics.