Rocket Fuel

Trick and Trade: The Scary Reality of the US Trade Deficit

Halloween is a day to celebrate the things that scare us. Millions of Americans will go Trick-or-Treating, dress up as ghosts and monsters, watch horror films, and visit haunted houses. While monsters and axe-wielding maniacs are terrifying, there are real world problems that are arguably more frightening. Take, for example, the United States’ troubling trade deficit. A growing trade deficit has a damaging effect on the economy and can hurt job growth. According to Trading Economics “The US goods and services deficit increased 3 percent to $40.73 billion in August of 2016. Figures came slightly worse than market expectations of a $39.3 billion gap as imports jumped to the highest since September last year and exports reached the highest in 13 months.”

halloweenelio2

The reason for the United States’ staggering trade deficit is the simple fact that we import more goods than we export. The fewer goods Americans produce leads to a worse trade deficit. As companies began to outsource American jobs, the trade deficit worsened and American jobs were lost. The United States currently has a trade deficit with 101 different countries.

The US trade deficit has many different effects on the economy. According to Investopedia, “When a country persistently experiences a trade deficit, there are predictable negative consequences that can affect economic growth and stability. If imports are more in demand than exports, domestic jobs may be lost to those abroad.” Between 2001 and 2013, the United States’ trade deficit with China cost 3.2 million jobs, with 75% of those lost jobs in the manufacturing sector.

One way to improve, and ultimately reverse, the trade deficit is to place an emphasis on American manufacturing. By again becoming a nation of producers, the United States can improve the trade deficit, improve the economy, and create American jobs. There are certain industries that, if revitalized, can make a major impact on improving the trade shortcomings of the United States. According to The Balance, “Consumer products and automobiles are the primary drivers of the trade deficit. In 2015, the U.S. imported $596 billion in drugs, consumer electronics, clothing, and other household items. America imported $348 billion worth of cars, trucks and auto parts, while only exporting $152 billion, running a deficit of $197 billion.” By investing in the automotive industry and buying American-made vehicles, everyday Americans can make a substantial impact.

Halloween is a day to be frightened of things that are largely fantasy. The rest of the year, however, there are alarming things that have an impact on everyday life. The trade deficit is a substantial problem in the United States, but there are sensible ways to fix it. Supporting American companies that produce American-made products can turn the US trade deficit “trick” into a “treat” that benefits all Americans.

 

Share Button