The Art of The Deficit (Editorial)

by Arkansas Business Editors  on Monday, Mar. 11, 2019 12:00 am   1 min read

The U.S. trade deficit in goods set a record last year, rising 10 percent to $891.3 billion. This despite President Donald Trump’s efforts to narrow the gap, primarily through the implementation of tariffs.

This is a good news/bad news/worse news situation.

The good news is that the trade deficit was so high partly because the U.S. economy was so strong. Americans had plenty of money to buy imported, mainly Chinese, goods.

Trump, however, has made closing the deficit one of his few consistently stated goals (along with Making America Great Again, Building the Wall and Locking Her Up), famously tweeting “trade wars are good, and easy to win.” But the tariffs he imposed have led to China and other countries to retaliate by levying duties on U.S. products, many of them agricultural products such as soybeans and wheat, resulting in demand and prices for those products plummeting.

Like the trade deficit, U.S. farm debt also set a record in 2018: $409.5 billion, a level not seen since the 1980s. Farm bankruptcies have soared. The Wall Street Journal reported last month that in the Eighth Circuit, a region that includes states from North Dakota to Arkansas, bankruptcies have jumped by 96 percent. The rate of filings is the highest in a decade.

“I’ve been through several dips in 40 years,” Nebraska farmer Kirk Duensing told the Journal. “This one here is gonna kick my butt.”

And so the bad and worse news: The very weapon Trump used to try to close the trade deficit — tariffs — not only failed; the weapon is hurting agriculture, Arkansas’ largest industry.


Speaking of records, last month the national debt of the United States topped $22 trillion for the first time in history.

 

 

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