Last time US saw a trade surplus was about three decades ago. This article indicates that there were some positive signs for America last quarter. Trade deficit was narrowed to $38.5 billion. Trade deficit can be overturned by focusing on domestic industries and production. But is it really worth to focus on decreasing imports by switching the priority to domestic industries?
Its always good for the government to focus on domestic production though it may mean increases in consumer prices. But that brings the economy out of the slum!! I also dont see how the economy is gonna maintain this since the fall was caused by low oil prices which are really unpredictable and cannot be depended on to show any real improvement in an economy.
ReplyDeleteI think this is the government showing that this could be a priority. With new technologies helping the oil industry, the economy could see a mini boom relatively soon. I think this is another good step forward for the U.S.
ReplyDeleteIn my opinion,inward-oriented policies are one more of the zombie policies. In a global world, it is absurd to focus on increasing the export and reducing the import. One may consider that this policy is a double-edged sword. On the one hand, the policy could help the US economy, however it could cause retaliation from the different countries. One, as government, cannot focus its policies on control the inflow of the capital, goods, and service. Those exchanges are part of the individual decision. On the other hand, this solution is an approach in the short-term.
ReplyDeleteThis appears as another good sign for the US economy. "For the entire year, the country’s imports of crude oil fell to their lowest levels since 1997 in terms of volume." This is important and is an example of the US becoming less reliable. I like to support domestic production and American companies so I am happy to see this.
ReplyDeleteI think increasing exports should be a bigger priority than decreasing imports. I believe trade is a good thing, especially in terms of utilizing specialization. American has a lot of things to offer other countries, particularly in the service and technology sector. If it is cheaper for Americans to buy some products produced in foreign countries then isn't their foreign consumption only increasing the personal wealth through savings?
ReplyDeleteI know in America there is fear that if we increase imports we will be losing American jobs, but I believe the oppose agreement can be made for increasing exports. If the United States government implemented more free trade agreement we could export more and our prices would hopefully be competitive in other counties. America has products and services the rest of the world wants!
I am encouraged that we are becoming less reliable on other countries for oil. Oil is one of the more powerful exports other countries have and it puts the U.S. in a compromising position since we are so dependent on it.
ReplyDeleteI agree with Bianca in the fact that we have many products and services that are competitive and in demand around the world that we should try to export more of. We can't compete with countries with no minimum wage or with millions more people than we have, so I think it's a lost cause to fight importing things like clothing, food, etc. That is a whole other conversation in terms of our business practices involving those industries, but in terms of trade, we just can't compete with the prices these other countries have and because of that we should focus on the industries we are more skilled and profitable in.
Economies are much more complex then ever and simply looking at trade surpluses or deficits will not reveal the answer to long term economic growth. As recently as 30 years ago, the trend in Latin America was this sort of export-lead growth. However it showed it limitations over the long run. If history has taught us anything it is that advances in technology and innovations will carry economies forward. Trade deficits are not of huge importance.
ReplyDeleteI think it's important not to get so caught up in the accounting that we forget what exports/imports really mean, and what the end goal of growth is. Just because a country imports a lot isn't necessarily bad-it just means you're consuming stuff from all over the world, and consuming stuff is the goal of growth! Exporting stuff lets us consume more stuff, which is nice too. I don't think a country should "focus" on either, comparative advantage will sort out where the biggest gains from trade are.
ReplyDeleteThe theory of 'Comparative advantage' is all well and good for the most part. But this is a good sign overall, especially when it comes to shifting oil production.
ReplyDeleteWe have for far too long, held our breath at the tidings of Middle Eastern affairs. We haven't had an involatile system of oil production from that region (that we rely so heavily on) since the years before OPEC's founding. As oil production increases in America, we can finally begin to rid ourselves of this dependency on the state of the middle east. If we can truly become 'oil dependent' as some pundits speculate by 2020--perhaps we will at last see some of our deficits turn to surpluses. The relationship between exports and imports is central to GDP growth.
I interpret this news as a positive for the future outlook of our American economy.