Question

The trade deficit is at a 9 year high for the US. How can we turn this around or is this something that needs to be corrected?

Answer 1

Trade deficits can be positive and negative. The positive trade refers to export is greater than imports similarly negative trade deficit refers to imports are more than exports.

The negative trade deficit is more problem than the positive to the economy.

The above case following policies will reduce the negative trade deficits.

1. Import substitutions producing substitute goods to import goods
2. Export subsidies to encourage domestic industries produce more export-oriented goods
3. Import restrictions on unnecessary goods or luxurious goods.