The Numbers
The value of imports and exports within a country's economy is known as the balance of trade and is calculated by taking the total value of imports from the total value of exports. U.S. exports amount to around ten percent of GDP, which was valued around 2.56 trillion U.S. dollars in 2021. The state of Texas produced the highest value of U.S. exports, around 375 billion U.S. dollars in the same year, with coal and petroleum products making up the highest share.The United States biggest single country trading partners are Canada and Mexico. Trade between these countries has been trending upwards since the early 2000's, and after a drop in 2020 - most likely due to the COVID-19 pandemic - picked up again in 2021.
A long-standing deficit
The balance of trade in the United States has been a longstanding topic of conversation among economists, business interests, and politicians. When a country imports more than it exports, this is known as a trade deficit. While large export industries have been present in the United States for many years, the U.S. trade deficit has been increasing and is the largest volume of any nation.Generally, economists cannot agree on if trade deficits are good or bad for an economy. On the one hand, a deficit could make an economy weaker, as more imports equals more money spent and more currency exiting the country. An overly simplistic view of trade deficit might lead one to believe that an economy buying more goods and services than it is selling may hurt job creation and economic growth. Many politicians in the U.S. cite the trade deficit with China as being the reason for a decline in U.S. manufacturing jobs and was the primary reason behind former President Trump's trade war with China. Automation and technological advancements are often cited as the main reason for a decline in U.S. manufacturing.
From a different perspective, a trade deficit also has the potential to attract more foreign investment in U.S. assets. Foreign firms operating in the U.S. tend to pay higher than average wages, invest more in research and development, and increase the efficiency of U.S. companies that they compete with. Additionally, for U.S. consumers, it means access to a wider variety of different goods and services.
