US trade deficit in its decline

The US international deficit is reported to fall by nearly 1 billion dollars since July, though the exports have been impacted by Hurricanes Harvey and Irma, as the ports were damaged. As the American current account is improved by the increased volume of exports, showing the strength of American products including services still have their comparative advantages and maintain competitive in the world market. In addition, due to the damage dealt by the hurricanes, both exports and imports are very likely to be significantly lower than the normal standards.

In addition, when the US government officially lowers the cooperate taxes, the costs of productions for many American exports would reduce further, this would potentially increase exports and lower imports, as the prices for goods and services produced within the US could be lower as the costs lower. Therefore, from this perspective, the US international deficit will keep dropping especially when the US government officially starts its tax cuts.

However, it does not mean that there is no downside for the US exports. Firstly, once the US tries to improve its products' competitiveness in the global market, other countries will do something similar or even more powerful and radical, this could reduce the comparative advantages of some American products. Secondly, the countries may have significant improvement in their comparatively advantageous sectors or sectors where the US has comparative advantages, for example, according to JD Power, Chinese car-makers close quality gap on foreign rivals. When other countries try to close comparative advantages held by the US companies, the US exports may reduce. Thirdly, the political environment is something that cannot be ignored when considering the global trading. Politics is always adding uncertainties to the world economy as well as the global trading network. Therefore, the US exports as well as imports could go both directions due to the political uncertainties.

Overall, within a stable global political environment, the US international deficit may continue to decrease, when the US government is giving more benefits to the US companies.