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US Trade Deficits



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Code : ITF0007

Year :
2004

Industry : General Business

Region : :USA

Teaching Note: Available

Structured Assignment : Not Available

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Introduction: The trade deficits of the United States reached a record high of $490.8 billion,3 inDecember 2003 (Annexure I). US has its major deficits against three countries – China, Canada and Japan (Annexure II). Daniel T Griswold4 said, “Perhaps no aspect of American trade is talked about more and understood less than the trade deficit. It has been cited as the conclusive proof of the unfair trade barriers abroad or a lack of competitiveness among the U.S. industries at home.”5 Trade deficit is an excess of net imports over net exports, or as an excess of net investments over savings. Some economists, however, viewed trade deficits as just amacroeconomic reality of investments, flowing fromabroad.But the ever-increasing trade deficit of the US with China and Japan had often been a topic of discussion, because of its cascading effect on the economy.

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