Eco/372 International Trade and Finance Speech
International Trade and Finance Speech
International Trade and Finance Speech
Foreign exchange rates and International trade are important aspects of economics. The United States macroeconomy’s health is determined by these concepts and their factors.
International Trade
Exports and imports are what encompass international trade balance. When there are more exports over imports a trade surplus happens and when there are more imports over exports a trade deficit happens. A country will acquire large quantities of foreign assets when it runs in a trade surplus so it can lend internationally to other countries. A country sells of its assets to other countries and becomes a big debtor nation when it runs on a trade deficit. A country will suffer economically when it decides to borrow more than it lends in other foreign countries. As a result of the expanded trade deficit, the value of the dollar will decline. According to Colander, "we pay for a trade deficit by selling off U.S. assets to foreigners—by selling U.S. companies, factories, land, and buildings to foreigners, or selling them financial assets such as U.S. dollars, stocks, and bonds" (Colander, 2010, p. 505), This being the case, in order to avoid the possible problems of a trade deficit the United States will have to produce more than it will consume.
Import Surplus
In the United States, the Census Bureau says, “The Nations international trade deficit in goods and services decreased to $38.8 billion in March from $ 43.6 billion (revised) in February, as imports decreased more than exports” (United States Census Bureau, 2013). An example of a surplus of import of the U.S. is electrical machinery. Which by itself, is the largest import category between the U.S and China. According to the office of the United States Trade Representative, 411 billion in 2011, a 9.4 % increase ($34.4 billion) from 2010, and up 299% since 2000” (Office of the United States Trade Representative, 2012). Through
International Trade and Finance Speech
Foreign exchange rates and International trade are important aspects of economics. The United States macroeconomy’s health is determined by these concepts and their factors.
International Trade
Exports and imports are what encompass international trade balance. When there are more exports over imports a trade surplus happens and when there are more imports over exports a trade deficit happens. A country will acquire large quantities of foreign assets when it runs in a trade surplus so it can lend internationally to other countries. A country sells of its assets to other countries and becomes a big debtor nation when it runs on a trade deficit. A country will suffer economically when it decides to borrow more than it lends in other foreign countries. As a result of the expanded trade deficit, the value of the dollar will decline. According to Colander, "we pay for a trade deficit by selling off U.S. assets to foreigners—by selling U.S. companies, factories, land, and buildings to foreigners, or selling them financial assets such as U.S. dollars, stocks, and bonds" (Colander, 2010, p. 505), This being the case, in order to avoid the possible problems of a trade deficit the United States will have to produce more than it will consume.
Import Surplus
In the United States, the Census Bureau says, “The Nations international trade deficit in goods and services decreased to $38.8 billion in March from $ 43.6 billion (revised) in February, as imports decreased more than exports” (United States Census Bureau, 2013). An example of a surplus of import of the U.S. is electrical machinery. Which by itself, is the largest import category between the U.S and China. According to the office of the United States Trade Representative, 411 billion in 2011, a 9.4 % increase ($34.4 billion) from 2010, and up 299% since 2000” (Office of the United States Trade Representative, 2012). Through
References: Colander, D. C. (2010). Macroeconomics (8th ed.). Boston, MA: McGraw-Hill/Irwin. Office of the United States Trade Representative. (2012). China. Retrieved from http://www.ustr.gov/countries-regions/china United States Census Bureau. (2012). Latest U.S. International Trade in Goods and Services Report. Retrieved from http://www.census.gov/foreign-trade/data/