Today, the US is the world’s largest trading nation – simultaneously leading the world in imports and being among the top two exporting nations in the world. As the top export market for almost 60 trading nations, the US has had a certain degree of economic and political leverage throughout the world, which allows it to shape global policies towards its own.
One such policy is its commitment to global free trade. The US has had a major role in the formation of global trade agencies such as GATT, as well as its future incarnation as the WTO. Apart from the guidelines set by these agencies, the US also has numerous Free Trade Agreements (FTAs) with individual nations.
The US trade deficit has been a hotly contested issue ever since the US first started posting trade deficits in the 1960s.
On the one hand, economists such as Federic Bastiat and Milton Friedman argue that successful, growing economies should see greater trade deficits while a shrinking economy would result in lower trade deficits.
However, the extent and size of the US trade deficit, particularly that of with China, has caused concerns within the US. In an interview with the Associated Press in 2006, Warren Buffet expressed his belief that “the U.S trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to political turmoil... Right now, the rest of the world owns $3 trillion more of us than we own of them.”
As such, there has been continual debate on whether the US should reduce its trade deficit.
Find out more the debate on the US Trade Deficit on EconomyWatch.com
Exports: US$1.612 trillion
Exports - commodities: agricultural products (soybeans, fruit, corn) 9.2 percent, industrial supplies (organic chemicals) 26.8 percent, capital goods (transistors, aircraft, motor vehicle parts, computers, telecommunications equipment) 49.0 percent, consumer goods (automobiles, medicines) 15.0 percent
Exports - partners: Canada 19 percent, Mexico 13.3 percent, China 7 percent, Japan 4.5 percent
Imports: US$2.357 trillion
Imports - commodities: agricultural products 4.9 percent, industrial supplies 32.9 percent (crude oil 8.2 percent), capital goods 30.4 percent (computers, telecommunications equipment, motor vehicle parts, office machines, electric power machinery), consumer goods 31.8 percent (automobiles, clothing, medicines, furniture, toys)
Imports - partners: China 18.4 percent, Canada 14.2 percent, Mexico 11.7 percent, Japan 5.8 percent, Germany 4.4 percent
Read more on about the US economy, including forecasts and industry information on EconomyWatch below.