Lower US Trade Deficits Signs Of Better Employment Opportunities: More Jobs Generated By Foreign Investments In American Soil

By JC Santos | Dec 05, 2016 05:00 AM EST

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The United States is importing more goods from foreign countries than exporting its own locally made products. Manufacturers and business owners are scared of the lower US trade deficits but better employment opportunities await the country. Due to a natural occurring economic correction, the country's labor market will enjoy the fruits of a troublesome situation.

The United States is a leading exporter of quality goods worldwide -- today in smaller quantities. The strong dollar, combined with previously high US trade deficits in select countries, make the price stable and more competitive. America's edge is that foreigners like their goods and products -- even in countries that US President-Elect Donald Trump plan to lower trade deficits with.

According to AEI.org in an interview with Mercatus Center Senior Fellow Dan Griswold, foreigners love American assets. He said that foreign trade allows outside investors to gain American assets -- a sign that these foreign businesses can open their own in-shore departments in the US, pay proper business taxes and create employment in different communities all over the country.

Griswold elaborated further that trade surpluses are made with specific countries and deficits with others due to "supply chains, comparative advantage and other perfectly normal factors."  If the US government decides to drive up prices for Mexico using lower trade deficits, it would mean Mexican business owners could decide to ramp up export into the United States with cheaper products and move their departments inside -- given it is part of their business expansion plans.

Griswold added that trade is always a win-win situation. A naturally occurring correction will always happen when changes in deficits and surpluses occur.

Foreign investments are likely to improve in the next few years following US President-Elect Donald Trump's announcements of ideas he will be implementing once in the White House. Indian IT companies fear a huge Visa blockage that would deter their exported workforce with the new US immigration policies. Companies such as Infosys, Tata Consultancy Services and Wipro have sped up their purchase of American assets to establish their local departments.

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