The economy of the United States is the world’s largest. Its nominal GDP was estimated to be $14. 3 trillion in 2009, almost three times the size of the economy of Japan. In purchasing power parity terms, it is larger than the economy of the People’s Republic of China. Notwithstanding, the U. S. economy also maintains a very high level of output per capita. Because of such a large economy, it has a great impact on the entire world. Trading, buying, and selling international goods are essential fuel in driving our economy to success.
Without foreign trade in our lives, we would in irregular in governing any commerce in the country. A central feature of the U. S. economy is the economic freedom afforded to the private sector by allowing the private sector to make the majority of economic decisions in determining the direction and scale of what the U. S. economy produces. What they produce can then be sold to other countries, or traded in some type of international relation. The number of workers and, more importantly, their productivity help determine the health of the U.
S. economy. Throughout its history, the United States has experienced steady growth in the labor force, a phenomenon that is both cause and effect of almost constant economic expansion with other countries. In addition to being the world’s largest economy, The United States is the world’s largest trading nation. Since it is the world’s leading importer, there are many U. S. dollars in circulation all around the planet. The dollar is also used as the standard unit of currency in international markets for commodities such as gold and petroleum.
Large foreign economies such as China, Japan, Arab states of the Persian Gulf, and the EU own huge dollar reserves so there is a fear that they will move away from the dollar. China’s reserves are more than $2 trillion, the worlds largest. China owns an estimated $1. 6 trillion of U. S. securities. In 2008, the total U. S. trade deficit was $695. 9 billion, which is $1. 8 trillion in exports minus $2. 5 trillion in imports. The deficit on petroleum products was $386. 3 billion. The trade deficit with China was $266. 3 billion, a new record and up from $304 million in 1983. The United States had a $144. billion surplus on trade in services, and $821. 2 billion deficit on trade in goods in 2008. In order to fund the national debt (also known as public debt), the United States relies on selling U. S. treasury bonds to people both inside and outside the country, and in recent times a growing percent of buyers are international. A major initiative of the Clinton administration is to promote free trade. This free trade was primarily focused on international companies and countries beyond Europe. Renewing the President’s authority to negotiate trade agreements on a “fast track” basis is an important step to achieve this goal.
However one of the issues with this is that imports are crushing the amount of exports. In other words, we as a whole country have become too reliant on other countries, and in doing so, have become a dependent nation in terms of goods and trading. We can see this best with our need for foreign oil and its negative impacts that has. Some of the major imports are: cars, electronics, office and processing machines, petroleum and oil related products, apparel products, telecommunication devices, industry and power generating machinery, and nonmetallic materials.
Some of the exports include electrical machinery, road vehicles, office machines and automatic data processing machines, transport equipments, miscellaneous clothes, machinery specialized for specific tasks, cereal, common American foods, and organic chemicals. As you can see, the American economy needs international trade as much as it also needs to find ways to become more reliant on ourselves rather on others. If by finding a common equilibrium between imports and exports, as well as making the dollar worth more without creating inflation with the economy, then you would create a very economically beneficial market for all parties.