The United States’ trade deficit is a big problem. This is an ongoing issue with no end in sight as the solutions our politicians propose are actually the main problem.
Exports are great, but not at the expense of a flood of job-killing imports. When we open up our borders through “free trade” we do more harm than good. We may gain a few exports, but our trade deficit proves the effect of so called “free trade” agreements is to increase our imports by a staggering amount. A few individuals may benefit from the exports, but far more Americans are hurt by this unyielding influx of cheap imports that put American companies out of business.
We have seen our trade deficit steadily rise as more and more “free trade” deals have been passed. The only thing that has tempered this rise was the slowdown in spending after the 2009 financial crisis. Consumer spending makes up 70% of our GDP, and in the wake of the financial crisis consumers spent less, causing our trade deficit to drop temporarily. As the economy has begun growing again we have seen our trade deficit balloon once again. Our trade deficit in goods increased by $91 billion from 2010 to 2011, rising to a staggering $737 billion.
Most of the items we now import were once made competitively here in the United States. Cars, clothing, electronics and other necessities were once dominated by American companies. Our government undercut these industries by implementing a misguided trade policy focused on low or non-existent tariffs. This was allegedly supposed to help our economy, but instead we saw our trade surplus turn into a massive deficit as foreign competitors outproduced our domestic manufacturers while undercutting their prices. American companies had no choice but to send their manufacturing operations overseas, taking scores of good paying American jobs with them.
We are stuck in a situation where even when politicians acknowledge the problem of our trade deficit, they offer the wrong solution. Many of them think more free trade is the answer, when it is obvious it is the problem. Free trade may be good for some countries, and even a handful of Americans, but on the whole it is bad for the United States and there is substantial evidence to back that up. There are numerous facts and figures, but one does not need to look any further than the poverty-stricken streets of Detroit if you want to see what free trade and the trade deficit have done to America.
It is time to acknowledge reality by stopping free trade and fixing our trade deficit.
By John Olen