U.S. Trade Analysis with other Countries
Abstract
Purpose- This paper presents the analysis of U.S. imports and exports by managing the trade balance. It also presents the leading U.S. imports and exports in terms of value along with the important partners.
Design/methodology/approach- The author explains the balance of trade including the rise and fall of U.S. trade deficit using the analysis between different countries imports and exports.
Research limitations/implications- The study is limited to analysis of imports, exports, trade surplus and deficit of U.S. trading.
Originality/value- This paper will help to build up the understanding about the basic imports, exports and importance of balancing the trade cycle for a country.
…show more content…
It can generate a lot balance problems to nation economy if the imports are increased then a certain amount. The currency can be devalued too due to a lot of imports. The economic performance is dependent on the currency value. The annual GDP consists of consumer spending, government spending and capital investment. The overall major term is calculated using exports minus imports. If the number of exports increases than the imports then the export figure would be positive. The positive net exports plays major role in increasing the growth of economy. Increased number of imports means more manufacturing in the industries, which means more jobs and more number of people are employed. Imports on the other parts are considered negative on the economy. The exports also indicate the inflow of cash inside the country. Imports can drag the GDP down (Townsend, 1979).
Effect of Exchange rates
The exchange rates is a complicated concept that derives a relationship between the imports and exports. The exchange rate has also effect on the trade surplus and deficit. A weaker currency will make imports more expensive than the exports and a strong currency will make imports cheaper.
U.S. Exports and Imports top partners
All the data of US exports is managed by the electronic export information except Canada through the automated export system. The filing of electronic information is necessary for the exporting. The Canada exports are managed
2. The balance of trade is the point where the difference between exports and imports is favorable for the country. When the country imports more than it exports, it results in a trade deficit and when the country exports more than it imports, the country runs into a trade surplus. The balance of trade for a countries economy is a very fine balance. The economic condition can change and a deficit or surplus may be an ideal situation.
The general standard for measuring the overall size of the nation's economic activity is the value of gross domestic product (GDP). One of the components of GDP is a measure of the value of exports and imports of goods and services. The hitch is that GDP includes a large component of non-tradable that does not or cannot enter into international trade flows to any significant degree-for example, most buildings and structures, and personal and government services. Consequently, even though internationally traded items such as financial services and travel and transportation services are included in GDP, when we compare the size of the foreign sector with the size of the domestic economy, we end up comparing apples with apples and pomegranates. As a result, comparing exports or imports of goods and services to GDP may understate the importance of international trade to relevant sectors of the domestic economy
Before we look at these forces, we should sketch out how exchange rate movements affect a nation 's trading relationships with other nations. A higher currency makes a country 's exports more expensive and imports cheaper in foreign markets; a lower currency makes a country 's exports cheaper and its imports more expensive in foreign markets. A higher exchange rate can be expected to lower the country 's balance of trade, while a lower exchange rate would increase it.
U.S. trade patterns are an important topic of study due to America’s power and central position in the international market. This topic of US trade partners and our trading patterns with those partners has been approached from a variety of perspectives by several economists. Namely, Sattinger (1978), Srivastava and Green (1986), Summary (1989), and Pollins (1989a and 1989b). The literature draws many conclusions from American competitiveness and the political and social factors that help explain bilateral trade patterns the choice of trade partners. And while there is an abundance of literature concerning this topic there has been little done from the perspective of how America’s trade partners have developed and shifted over the last 25 years, which is what this paper will focus on achieving. International trade flows are also an important topic and have been estimated by many economists including, Tinbergen (1962), Anderson (1979), Helpman and Krugman (1985), Helpman (1987), Feenstra (2002), and Anderson and van Wincoop (2003). Each of these researchers used a variant of the gravity model to estimate trade flows which not only demonstrates the continuing empirical validity of the model but gives firm background with which to base this analysis. The basic gravity model states that the volume of trade between two countries is proportional to the size of the two economies, and various measures of trade resistance such as geographical distance between the countries,
The Complete Idiot's Guide to Economics © 2003 by Tom Gorma Retrieved on February 27, 2012 http://www.infoplease.com/cig/economics/effect-imports-exports-gdp.html
Effect of imports and exports: decreasing imports, increasing exports. If the Australian dollar depreciates, Australian exports become cheaper and
International trade has grown over the years due to its many benefits to different countries across the globe as it interprets for a good part of a country’s gross local merchandise. It is also one of the important sources of income for a developing country. The Canada–US economic relationship ranks as one of Canada’s most important foreign policy objectives because Canadian prosperity is closely linked to the growth of the United States’ economy. Therefore, expanded international trade for Canada will be beneficial as it will increase trade and resources with other countries, employment, sales and profits for Canada.
- For the foreign producers, when their currency weakens, production becomes cheaper (especially if they have currency reserves in dollars), and their sales go up, since the weaker currency is more attractive to foreign buyers.
3. a. When an American art professor spends the summer touring museums in Europe, he spends money buying foreign goods and services, so U.S. exports are unchanged, imports increase, and net exports decrease. b. When students in Paris flock to see the latest movie from Hollywood, foreigners are buying a U.S. good, so U.S. exports rise, imports are unchanged, and net exports increase. c. When your uncle buys a new Volvo, an American is buying a foreign good, so U.S. exports are unchanged, imports rise, and net exports decline. d. When the student bookstore at Oxford University sells a pair of Levi's 501 jeans, foreigners are buying U.S. goods, so U.S. exports increase, imports are
International trade affects the value of a currency, particularly through how much export or imports a nation may have, countries selling so many goods and services to others, tend to appreciate their Forex standards and those importing highly normally have their currency fall in value since they are spending more to their trading partners than they gain from them.
Similarly, a higher real exchange rate (lower competitiveness) reduces export demand and raises import demand. The fall in net exports induces both a current account deficit and lower aggregate demand, leading to a domestic slump as shown in the bottom left hand quadrant. The figure shows other shocks that move the economy into other quadrants, causing departures from both internal and external balance.
An unfalteringly rising bilateral trade deficit resulting from the quintupled value of U.S. exports to China that is stunted by the surge of imports from China into the U.S. The major source of the expanded deficit – increasing
Americas insatiable demand for cheap goods has caused an increased gap in the annual U.S. trade deficit over recent years. The U.S. trade deficit with China was an astronomical $365.7 billion in 2015. The United States imports consumer electronics, clothing and industrial machinery from China. Many of the imports are from U.S. based corporations that send components to China for less expensive assembly. After assembly the products are shipped back to the U.S market for retail sale. Although the profits are attributed to American-owned companies which are ultimately domestic entities the merchandise is classified as an import by law. The growing trade deficit with China is a hot topic in American politics. Legislators often try to impose tariffs or other forms of trade protectionism against China to support
However, the U.S has service trade surplus with China (ustr). But the huge deficit in goods makes its services surplus unnoticed. For instance, in 2016, the good trade deficit with China was “$347.0 billion” whereas the service trade surplus was $37.4 billion (ustr). China is the third leading importer of U.S goods and services. Over the years, U.S is increasingly offering its services to China. China also demands high finished products from the U.S. Other goods that U.S exports to China are agricultural products. China is the second largest importer of U.S agrarian products (ustr). Hence, the Chinese market is vital for U.S agricultural goods producers.
This study was conducted to (a) determine which market is the most dynamic for Thai exports, (b) measure the intensity of trade between Thailand and its regional trading partners and (c) test whether the modified Revealed Comparative Advantage (RCA) index, which was developed based on the gravity trade model, is applicable for measuring Thailand’s competitiveness resulting from its border trade policy. The RCA index is typically applied based on three conceptual points. First, the trade balance index (TBI) can be used to indicate whether GMS countries are net exporters or importers. Second, the trade balance is typically decomposed by product and country (i.e., bilateral trade balance). Relevance refers to the degree of concentration of trade imbalances