Why the Trade Deficit Isn't a Trade Deficit Anymore

The U.S. trade deficit hit $60.3 billion in March 2026, but Lucas and Luna argue that the conventional focus on goods is missing half the story. Services exports are surging — software licensing, streaming rights, cloud computing, financial services — and the deficit in services has actually shrunk to a fraction of what it was a decade ago. The hosts walk through the latest Bureau of Economic Analysis data showing that American exports of services grew at a compound annual growth rate of roughly 7 percent over the past five years, while goods imports grew at only 4 percent. They explain why the strong dollar doesn't hurt services exports the way it hurts manufacturing, and why the Fed's focus on inflation might be overlooking a structural shift in how America trades. Specific numbers: services exports hit a record $1.1 trillion in 2025, offsetting about 20 percent of the goods deficit. The episode ends with a look at what this means for the dollar and for trade policy in 2026. #TradeDeficit #ServicesTrade #Exports #Imports #StrongDollar #Inflation #Fed #SoftwareLicensing #CloudComputing #Streaming #BureauOfEconomicAnalysis #USDollar #TradePolicy #Economics #FexingoBusiness #BusinessPodcast #TradeEconomics #GlobalTrade Keep every episode free: buymeacoffee.com/fexingo