President Trump says he is outraged by the fact that the United States imports more goods than it sends to the rest of the world. What he rarely mentions, though, is that when it comes to services, the tables are turned.
Service sectors — which include the finance, travel, engineering and medical industries and more — make up the bulk of the American economy. Exports of these services brought more than $1 trillion into the United States last year.
But that dominance also gives other countries some clout in negotiations — including the ability to impose some pain on the U.S. economy as they look to retaliate against Mr. Trump’s tariffs on goods.
The European Union, for instance, could use tools designed to restrict services coming into the bloc as a cudgel.
“The real leverage that the Europeans have is ultimately on the services side,” said Mujtaba Rahman, managing director for Europe at the Eurasia Group, a political research firm. “It will escalate before it de-escalates.”
The United States is the largest exporter of services in the world, and a large share of those services, from financial services to cloud computing, are delivered digitally. The country ran a trade surplus in services of nearly $300 billion last year.