As if we did not have enough risk affecting financial markets, we added the possibility of trade wars last week. Discussion of imposing tariffs on certain imported goods could lead to retaliation by our trading partners and disrupting the flow of goods and services. The largest drag on U.S. economic growth in the past two years is the large increase in the trade deficit. Much of the growth in consumption is being met with imports.

We have expected the trade deficit to narrow as growth in foreign markets has improved and the dollar has declined. A lower dollar relative to other currencies would make our products and services less expensive in these growing foreign markets and make their goods more expensive in our market…

ProBank Austin Advisor – March 5, 2018