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Turning the Tide: How Changing Transportation Can Reduce the Trade Deficit | Elio Motors

In the course of every election cycle, certain topics emerge as the most important issues of the day. The matter of creating or maintaining a robust economy is often a major issue, as is creating jobs and keeping unemployment low. The trade deficit may not always be a hot button issue, but it is continually a crucial factor in the health of an economy. According to the Economic Policy Institute, trade deficits “are a drag on economic growth and overall employment.” Making changes to American transportation can represent a way to cut the deficit and improve the economy.


A trade deficit occurs when a country is importing more goods than it is exporting. It is no surprise, then, that as manufacturing jobs began to leave the United States, the trade deficit began to grow at an exponential rate. By the most recent estimate, the U.S. trade deficit is currently $43.4 billion. The United States has not enjoyed a trade surplus since 1975.

The slowing of American manufacturing and the closing of American factories has had wide ranging implications. Many workers were laid off and goods that were once made and purchased in the United States were now being manufactured abroad. As a result, the trade deficit ballooned, unemployment rose, and the economy suffered.

The automotive industry plays a major role in the trade deficit. By one estimate, the automotive industry accounts for one-third of the total trade deficit. When American consumers purchase foreign vehicles, which they are doing at record rates, the trade deficit begins to climb. In response, American automakers are beginning to re-invest in manufacturing facilities on U.S. soil. If automakers and consumers work together, the trade defecit will shrink.

Reducing gasoline consumption offers another way to reduce the trade deficit. According to an article published by Yale University, “Fewer gas-guzzling cars and trucks would help the equation.” The logic is simple: as Americans use less gasoline, the need to import foreign oil lessens and less wealth pours out of the country. Reducing dependence on foreign oil offers a way to greatly strengthen the economy.

Discussions regarding the economy will become unavoidable in the months to come. While it may not be mentioned explicitly, the trade deficit plays a large role in the overall health of the economy. Studies have shown that Americans prefer to purchase American-made products, which should translate into increased sales of American-made vehicles. By increasing the sales of American vehicles, it would, in turn, create more American jobs. However, the combination of increasing American-made vehicle sales and increased fuel-efficiency can help cut the trade deficit even more, greatly improving the health of the economy.

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