The Trump administration's imposition of tariffs on US imports to address a perceived payments deficit has drawn sharp criticism from economists. The core argument centers on the administration's focus on the net international investment position (NIIP), which reached a record negative $26 trillion in 2024, or 89% of GDP. However, the FT contends this deterioration stems primarily from the strong performance of US equities and a rising dollar over the past decade, not persistent trade deficits. US liabilities now include significant foreign holdings of US equities, a shift from the historical role of the US as a global banker holding mostly liquid Treasuries.

This equity exposure means valuation changes significantly impact the NIIP, masking the true health of the current account deficit, which remains around a negative 50% of GDP. The FT argues the US is not facing an imminent sovereign payments crisis but rather a market correction.