April is gone and stats are coming out from the first quarter of the year. We are seeing some interesting economic highlights. At Fund Control we keep our eyes on what is changing and what is staying the same to ensure we can continue to offer innovative fund control solutions. Keep reading to find out some of the highlights, then contact us at 800-625-5972 if you are interested in learning more about our fund control software.

The “Twin Deficits” Problem is Back

Ten years ago, there was a lot of chatter about what was referred to as the “twin deficit” problem. The twins in this scenario were the $1 shortfall in foreign trade and in the federal budget. For a while, after the recession was over and when the U.S. started becoming more energy self-reliant, that trade disparity was smaller and the government was making a larger effort to align spending with revenue.

However, those deficits have been increasing again. In fact, the goods and services trade gap is now back to -$600 billion but has a significant services surplus. The goods part of that is getting close to -$1 trillion again. As spending goes up in Washington, the twin deficits problem is once again relevant.

How the Imposition of Tariffs Have Affected the Economy

There have been a number of tariffs imposed by the Trump Administration. They are an effort to correct the imbalance in foreign trade. Though they have been introduced on many products, they are essentially targeted at China. Every month, China makes up around half of the U.S. goods trade deficit. The idea is that with the right amount of leverage, the government will win concessions from Beijing.

About half of the trade deficits each month are in consumer goods. This includes China’s shipments of electronics, clothing, and household merchandise. About one-fourth of the U.S. trade deficit is in cars and car parts, which China is not particularly involved in. Instead, Mexico has 44% of the auto trade deficient with Japan getting about 25%. We are in a mild surplus with only one country – Canada.

It is important when considering these tariffs aimed at China to consider that the United States is not the largest marketplace for exporters from China. About half of their exports go to other Asian nations, 20% goes to Europe, and another 20% goes to North America, but that includes Canada and Mexico too. There are several factors in play that could affect how successful the tariffs are.

We Are Here to Offer Help to Disbursement Companies, Banks, and More

At Fund Control we are proud to offer software used by disbursement companies, construction lending banks, and other companies. If you would like to learn more about how our software can be useful, contact us at 800-625-5972 for a free demo.