What are some of the suggested remedies for the U.S. trade deficits? What remedies have been attempted? What remedies are left to try?

At certain points in the business cycle, the U.S. could attempt to reduce the trade deficit by changing the mix of fiscal policy and monetary policy. Specifically, if expansionary monetary policy is used at the same time as contractionary fiscal policy, we would see lower interest rates in the U.S., depreciation of the dollar, and a decrease in the trade deficit. However, such contractionary fiscal policy was out of the question given during the Great Recession. In addition, the U.S. can encourage its trading partners to stimulate their economies thereby increasing U.S. exports. Another method that could be used would be to increase the personal saving rate in the U.S. This has been very difficult to accomplish but movement to a consumption tax such as the proposed FairTax would provide an incentive towards greater saving. Lastly, a reduction of tariffs and quotas would actually improve the U.S. trade balance. Such trade restrictions do decrease imports; however they also lead to appreciation of the dollar and retaliatory tariffs from trading partners.