The trade deficit means that imports are greater than exports, and more foreign exchange is used to buy foreign products, so foreign exchange reserves are less!
Give a simple example:
Exports are like company sales, imports are like company purchases, and foreign exchange reserves are like company deposits. When sales exceed purchases, it is a surplus, and the company has more deposits. On the other hand, if the purchase volume exceeds the sales volume, it is a deficit, and the company will use the money stored in the account to buy it, or even borrow money from the bank, resulting in liabilities.
Excessive surplus or deficit is not good. The surplus is large, and bank deposits increase, but you have to bear the risk of inflation (equivalent to foreign exchange depreciation). For the same money, you can only buy less things tomorrow. It is better to invest in mass production. The depreciation of fixed assets is not as fast as that of currency! Moreover, there is too much deficit, not only interest is a great burden, but also the right to operate will be restricted by banks (more serious for the country, the lifeline of the national economy is in the hands of other countries).