April 2018 Newsletter

The US trade deficit

It has been a turbulent year for major stock market indices. There were wide fluctuations as both economists and common investors speculated how recently announced tariffs on aluminum and steel exports would affect the domestic and global economies.

Reasoning for the tariffs
These tariffs are being considered to theoretically reduce the significance of trade imbalances that the U.S. maintains with other countries. The prevailing thought is that these extra fees for importing American goods and services would end up generating more capital to be infused in the domestic economy.

This information, in conjunction with President Trump’s willingness to engage in “trade wars” with countries that export more goods to the U.S. than they import, is making many individuals ask: What is a trade deficit, and what does it mean to the domestic economy?

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