Trade deficit increases in August

Hillbilly wisdom: as long as you cannot provide for your needs, you will have to trade for those items you need but do not produce. If imports are greater than exports you have a trade imbalance.

Let’s assume that the same number of items are traded each month

Tariffs are meant to shrink the imbalance between U.S. and foreign nations but in reality the other countries look for other markets. They don’t buy as much or don’t buy at all. The trade deficit increases. Further, we assume we already had the best deal we could get. So, we have to continue to purchase to fulfill our needs as we look for substitute markets. Non-production leads to dependence on others and a limitation on our independence.

Simple conclusion is until you have other markets or can produce the things you need, don’t make the situation worse by driving away the markets that provide the materials you need.

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