The U.S. Trade Deficit Is Growing, but We Can Be the Solution
The U.S. Trade Deficit Is Growing and That's a Problem
The U.S trade deficit increased from $676.7 billion in 2020 to $859.1 billion in 2021—an increase of $182.4 billion or 27 percent in one year. As this trend continues, America will be importing more than it exports on a regular basis. And while the monthly trade deficit dipped slightly in March 2021 to $85 billion, it increased again in April to $87.1 billion. We import more consumer products than any other country in the world—$2.6 trillion worth in 2020. And while exports have been growing steadily over the past few years, they haven't been growing fast enough to keep up with imports. As a result, our trade deficit keeps getting bigger and bigger.
Why the U.S. Trade Deficit Matters
The U.S. trade deficit is a problem for a number of reasons:
1) It indicates that the United States is not producing enough goods and services to meet domestic demand, which means we are relying on other countries to provide for us. This is not sustainable in the long-term and will lead to an erosion of our economic power as other countries increase their production while we decrease ours.
2) The trade deficit also means that we are sending more money out of the country than we are bringing in, which can lead to a depreciation of the value of the dollar and inflationary pressure in the economy.
3) The trade deficit can also be a sign that other countries may be taking advantage of us economically, as they may be able to sell their goods and services to us at below market value while we are forced to pay above market value for their products due to higher demand here in the United States. This can lead to a loss of jobs and income as American companies are forced to compete with cheaper imported goods and services. It can also make it difficult for American consumers to purchase goods and services that they need or want since they may be priced out of the market by lower-priced imports.
4) Finally, the trade deficit can have negative political implications as it can be used by other countries as leverage against us in negotiations or as a tool to influence our domestic policies. For example, if another country threatens to cut off our access to their markets or products, we may be forced to make concessions in order to avoid an economic crisis here at home. Covid-19 provided a stark reality of the complications that can occur for our nation by needing to ship all of our products and materials from other countries that hold no concern for individuals and families in our nation.
How to Fix the U.S. Trade Deficit
The United States needs to increase its exports in order to reduce the trade deficit and become more economically self-sufficient. One way to do this is by investing in domestic manufacturing and production so that we can create more goods and services to sell abroad. This will create jobs and income here at home while also increasing our ability to compete in global markets. Additionally, the United States needs to negotiate better trade deals with other countries that are more favorable to American businesses and workers.
The decrease in exports while increasing our imports will continue to erode the prosperity of our communities, our states, and our nation. We need to make things here again and sell our craft and passion to the rest of the world. That way, we can create jobs for Americans and reduce our trade deficit at the same time. It's time for America to become the land of makers and doers once again, shaping our own destiny.
The best way to increase our local production is knowing how and where to support American made businesses. That is the foundation of Apollo. There are many Americans who want to buy American made products and support the businesses that produce them, but often they do not know where to find them. By bridging consumption to American made businesses, we can begin to shift the economic power back to American businesses and communities.
