U.S. trade and account deficit hits highest quarter in more than eight years
While President Trump belligerently threatens China with a trade war, the U.S. continues to rely too much upon foreign imports for much of their goods. ¬†And in new data out on Sept. 19, the account deficit for trade reached an eight year high as the U.S. found itself down $123 billion for the second quarter.
The deficit in the broadest measure of US trade rose to the highest level in more than eight years this spring, reflecting in part a drop in fines and penalties paid by foreign companies. The deficit in the current account increased to $123.1 billion, up 8.5 percent from an imbalance of $113.5 billion in the first quarter, the Commerce Department said Tuesday. It was the biggest deficit since a gap of $150 billion in the fourth quarter of 2008. The current account is the most complete measure of trade because it includes not only goods and services but investment flows and other payments between the United States and the world. –¬†Russia Today
America’s trade deficit in 2016 was $502 billion, and if you extrapolate the second quarter of 2017 into the end of the year, the deficit will once again likely be over $500 billion.
One of the primary platforms that Donald Trump ran on when he won the Presidency was in regards to bringing back jobs and manufacturing, and trying to lessen the trade deficit by a large amount over the course of his term in office. ¬†However Congress has done little to aid the President in his quest to lower or reform taxes which could bring back those jobs from overseas, and as a result the economy still relies heavily on foreign imports for many of their daily consumptions.
Tarrifs and an all-out trade war are not the answers to America’s economic problems. ¬†And with the global economy at best providing a sluggish recovery since 2008, most nations have become protectionist by engaging in a currency war to protect their industries and exports, and this will make it much more difficult for the U.S. to gain any ground against trade partners bent on looking out for their own.
Kenneth Schortgen Jr¬†is¬†a writer for¬†The Daily Economist,¬†Secretsofthefed.com,¬†Roguemoney.net, and¬†Viral Liberty, and hosts¬†the popular¬†youtube podcast¬†on Mondays, Wednesdays and Fridays.¬†Ken can also¬†be heard Wednesday afternoons giving an weekly economic report on the¬†Angel Clark radio show.