BEHIND U.S. FOREIGN TRADE DEFICITS IN THE 1980s Sun Haishun (86) The relative decline of the competitiveness of U.S. manufacturing industries is a minor reason for the increase of trade deficits. The major reasons are the high demand in the U.S. market and the market-expanding activities by foreign multi-national companies. High domestic demand is a result of high economic growth, private consumption and government deficits. The activities by the multi-national companies have made it possible for large amounts of capital and commodities to flow into the United States.