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1.Explain how to calculate the balance of trade. How does the growing United States trade deficit impact the e?3 years ago - 1 answers
The money being spent to buy things from other countries is much larger than the amount of money where other countries are buying from the U.S.
The United States reported a trade deficit equivalent to 46.3 Billion USD in January of 2011. The United States is the most significant nation in the world when it comes to international trade. For decades, it has led the world in imports while simultaneously remaining as one of the top three exporters of the world. Main exports are: machinery and equipment, industrial supplies, non-auto consumer goods, motor vehicles and parts, aircraft and parts, food, feed and beverages. U.S. imports non-auto consumer goods, fuels, production machinery and equipment, non-fuel industrial supplies, motor vehicles and parts, food, feed and beverages. Main trading partners are: Canada, European Union, Mexico, China and Japan.
The deficit means we are buying more than we sell. To make up for the difference people and governments from other countries buy U.S. investments assets. China, for example, has been a large investor in U.S. Treasuries for many years, but hopes to earn a higher return on its foreign investments by diving into stocks, bonds and commodities such as oil and gold.