Why the Trade Deficit Is Getting Bigger — Despite All Of Trump’s Promises

In Economy On

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“The trade deficit is a function of the dollar, not a function of bad trade practices abroad,” said Brad Setser, who was a White House and Treasury Department economist in the Obama administration. “But the basic problem the administration faces is, its own tax policy and fiscal policy is driving the dollar up.”

The dollar has risen more than 7 percent this year against the currencies of major U.S. trading partners, part of a 22 percent gain since the end of 2013, according to the Bank of International Settlements index.

A stronger dollar acts as a price increase for U.S. goods sold abroad while making imported products less expensive for Americans. The greenback’s effect can be glimpsed in Liberty Tabletop’s near-exclusive focus on domestic sales as well as government statistics showing that, excluding oil, U.S. exports of goods in September were lower than they were four years ago.

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