International Trade and Finance Speech
March 25, 2013
The impact of international trade on the United States economy is quite significant. While historically the United States had been a nation that provided credit to other countries, it is now in a decline. This decline has caused the United States to become a major debtor, owing millions of dollars in interest to other countries. This is a result of an excess of importing, which has resulted in a surplus of imported goods. This surplus can be necessary to help offset the current deficits, but may stunt the economic growth of the United States. When there is a surplus of imported goods from foreign countries, the United States slips into a deficit. This deficit is created from the trade balance. The largest quantity of imported goods is the transportation equipment. Between 2006 and 2010, automobiles were the highest ranked import, followed by energy-related products. This surplus of imported vehicles resulted in the inability of American automobile manufacturer to produce comparably priced vehicles. This further resulted in U.S. automobile manufacturers needing to either receive government aid in some cases, or file bankruptcy and close for good. The closing of several automobile manufacturing companies and plants resulted in an increase in the unemployment rate, as displaced workers have been unable to find comparable work. International trade can also have a major impact on the Gross Domestic Products (GDP). It can affect the level at which imports and exports are operating, it can reduce consumer spending, and affect the unemployment rate. A higher rate of exports to imports will increase the GDP, while more importing will have the opposite effect. These fluctuations in trading have negative and positive effects on the U.S. economy. The more the United States exports, the more income it is gaining. This is good for the rate of employment, as the higher demand for U.S. products requires more...
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