United States Trade Deficit
Trade deficit occurs when there is a negative balance of trade. This has occurred in the United States recently, with a deficit 28 times larger than in the Reagan administration. Consequently, the United States imports exceed its imports, where there is a depletion of the United States currency to foreign market, without having a balanced input and output. According to the United States Census Bureau, in March of 2012, the United State’s exports totaled $9.8 billion while its exports totaled $31.5 billion. In 2011, the total amount of exports was $103.9 billion while its imports were $399.3 billion, resulting in a negative balance of $295.5 billion (“United States Census”, 2012). Even though the United States had a surplus in the area of services in 2011, the United States trade deficit pertaining to the trade of goods has been continuously increasing, creating an exacerbated program in the United States and the world economy. Specifically in China, its main source of imports to the United States is from non-oil manufactured goods. One of the issues at stake is China’s illegal currency manipulation, which needs to be addressed in order to thwart these consequences (Scott, 2012).
Consequences of Trade Deficit
It is essential to analyze the impact of the trade deficit in order to surmount its trade implications. The 2011 Economic Policy Institute stated that 2.8 million jobs in...