Wednesday, April 5, 2017

Trade Deficit Declines but Long Term Changes Needed

The U.S. trade deficit dropped to 43.6 billion , down from $48.2, in February. The orders were made months ago but it could indicate a greater need for American products on the global market. Increasing U.S. exports can have advantages when products are produced at a cost sensitive and value oriented approach.

American made products are known for their quality based on the time and effort working on perfecting the end result. Many companies seek to emulate cheaper version of our products in an effort to tap into our ingenuity and profits margins. This leaves American businesses always rushing forward with a hungry pack of followers behind.

Frustration over how to compete when a large segment of the population is looking for the cheapest product regardless of its quality or functionality. This can make if difficult for American producers to compete even though they clearly stand at the top of the product list. New ways of thinking about price and quality are needed.

This leaves American producers seeking to lead the market as a way of gaining a competitive advantage. They create new products and then patent them as quickly as possible before other countries seek to copy them. The end result is that they are protecting their investment in design and development but don't seem to corner the market.

The trade deficit has temporarily shrunk but there is a lot more that needs to happen before it can be sustained. American policies will should shift to encourage greater business competitiveness.  Lowering taxes may be one way to do this but also developing local policies that encourage the development of business that are associated with exports. The way in which businesses work together may be a second part of gaining marketing dominance.

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