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How Do We Fix America’s Trade Deficit?

Free Trade was meant to allow businesses to compete in the global market, free from government restriction. Though it seems free trade is a mere illusion that the average politician is next-to-clueless about. President Trump has been trying to develop free trade, by engaging in a trade war with our greatest industrial competitor, China.

The tariffs imposed by Trump over the past few months have sent a message to China that their practice of unfairly restricting market access is not acceptable. China has been forcing foreign companies to reveal trade secrets in order for access to their markets, and they have tolerated the theft of American intellectual property for decades. In light of this, many are applauding the strong moves made by President Trump recently.

However, the tariffs have led to drops in the U.S. stock market, pushback from allying countries, and unforeseen consequences for certain industries. One such industry is solar. The trade war is heavily impacting American citizens working in the solar industry. Although the move has created a few hundred manufacturing jobs for Americans, it has lost an estimated 23,000 in installation jobs. Experts in the industry claim growth is down 11%, and the tariffs have made it more expensive for cities that want to move towards solar as a source of sustainable energy. Click here to learn more about the impacts the tariffs are having on the solar industry.

Some have proposed that the U.S. rejoining the Trans-Pacific Partnership. This is not a good idea because it lets other countries dictate what we set our trade prices at. Instead, we should negotiate with each individual country and come to an agreement on foreign trade policy. In addition, we should utilize cheap labor in third world countries. At the same time we need to raise them up, and show them how to be better, more efficient, and more independently wealthy. Every country is different, and our relationship with each country is different. Thus, it doesn’t make sense for the U.S. to be bound by the general rules of trade that are dictated by the TPP.

The most effective way for the U.S. to solve the trade deficit is to increase exports to foreign countries, and not to decrease imports. That’s because decreasing imports doesn’t create jobs, as we’ve seen with the solar industry. Increasing U.S. exports of goods such as agriculture and cars is the best way to both protect American industry and decrease the national deficit. 

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