Washington
CNN
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President Donald Trump repeated false claims about the US trade relationship with Canada and Europe in virtual Thursday remarks to the World Economic Forum in Davos. He also delivered a smattering of other misstatements and exaggerations about trade, tariffs and economic policy.
Here is a fact check of some of his remarks.
In his speech at the World Economic Forum Annual Meeting, Trump repeated false claims about the European Union. He said: “They don’t take our, essentially, don’t take our farm products, and they don’t take our cars.”
It’s not true, “essentially” or otherwise, that the EU doesn’t buy US farm products. The US government says the EU bought $12.3 billion worth of US agricultural exports in the 2023 fiscal year, making it the fourth-largest export market for US agricultural and related products behind China, Mexico and Canada.
And while US automakers have often struggled to succeed in Europe, according to a December 2023 report from the European Automobile Manufacturers’ Association, the EU is the second-largest market for US vehicle exports — importing 271,476 US vehicles in 2022, valued at nearly 9 billion euro. (Some of these are vehicles made by European automakers at plants in the US.)
Trump complained of the US trade deficit with China, saying, “We’ve been having massive deficits with China. Biden allowed it to get out of hand. He’s – $1.1 trillion deficits; ridiculous, and it’s just an unfair relationship.”
This is misleading at best. The record US goods and services trade deficit with China, about $378 billion, was actually set during Trump’s first presidency in 2018. It has bounced around under Biden, but it has been lower than $378 billion every year, and the last available full-year figure, for 2023, was about $252 billion – lower than in any year of Trump’s presidency. The Trump-era low was about $282 billion in 2020.
When Trump mentioned “$1.1 trillion deficits,” he may have been thinking of the total US trade deficit with the world, which was about $1.1 trillion in 2023 if you only consider trade in goods and don’t count services. But he strongly suggested he was talking about trade with China in particular.
During the question-and-answer portion of the Thursday event, Trump falsely claimed that the US has a trade deficit with Canada of $200 billion or $250 billion, saying “it’s not fair” that the bilateral deficit should be this high. In fact, the US goods and services trade deficit with Canada was about $40.6 billion in 2023, according to the US government’s Bureau of Economic Analysis.
Even if you only consider trade in goods and ignore the services trade at which the US excels, the US deficit with Canada was about $72.3 billion in 2023, the bureau reported, still far shy of Trump’s figure. And it’s worth noting that the deficit is overwhelmingly caused by the US importing a large quantity of inexpensive Canadian oil, which helps keep Americans’ gas prices down.
The US imported about 3.9 million barrels of Canadian crude oil per day on average in 2023. The heavy crude from the Alberta oil sands is in high demand by US refineries, mostly in the Midwest, that are designed to process heavy crude – into products like gasoline and diesel – rather than the lighter crude the US tends to extract domestically.
“If (hypothetically) Canadian oil were not available, many US refineries would struggle to find heavy crude elsewhere, and they might even stop operating in such a scenario. Historically, Venezuela had been a large producer of heavy crude, but Venezuela’s oil industry is a shadow of its former self,” Pavel Molchanov, an energy expert who is an investment strategy analyst at Raymond James, said in an email.
“So, in fact, importing Canadian oil helps protect jobs in the US refining industry.
Furthermore, US refining companies appreciate the fact that Canadian heavy crude is cheaper than the light sweet crude that is produced in Texas and Louisiana.”
Trump claimed that during the Biden administration, “it was the highest inflation, probably, in the history of our country.” Trump qualified his claim with the word “probably,” but it’s still false.
Trump could have fairly said that the year-over-year US inflation rate hit a 40-year high in June 2022, when it was 9.1%. But that was not close to the all-time US record of 23.7%, set in 1920. (And the rate has since plummeted. The most recent available inflation rate at the time Trump spoke here was 2.9% in December 2024.)
Trump’s claim was also wrong if he was referring to the increase in prices from the beginning of Joe Biden’s presidency to the end. Federal figures show that cumulative inflation from when Biden took office in January 2021 through December 2024 was about 21%. (Figures for this month, the last partial month of the Biden administration, will be released next month.) The same figures show that cumulative inflation during President Jimmy Carter’s four years in the White House, from early 1977 to early 1981, was about 49%.
Trump said the US corporate tax cut was slashed from 40% to 21% as part of his signature 2017 Tax Cuts and Jobs Act. “It was at 40%, and I got it down to 21%, the corporate tax,” Trump said.
This is an exaggeration. Prior to the 2017 law, the top corporate tax rate was 35%, not 40%. Trump may have been thinking of the top individual income tax rate, which was 39.6% prior to the TCJA, which brought it down to 37%.
Cutting the corporate tax rate to 21%, from 35%, was a major provision of the TCJA and was the most significant corporate rate change since 1986. Unlike the law’s changes to the individual income and estate taxes, which expire at the end of this year, the corporate rate reduction is permanent.
Trump also took the opportunity to tout his campaign pledge to reduce the corporate tax rate to 15% for companies that manufacture their products in the US.
CNN’s Ella Nilsen contributed to this article.