Purpose- This paper presents the analysis of U.S. imports and exports by managing the trade balance. It also presents the leading U.S. imports and exports in terms of value along with the important partners. Design/methodology/approach- The author explains the balance of trade including the rise and fall of U.S. trade deficit using the analysis between different countries imports and exports. Research limitations/implications- The study is limited to analysis of imports, exports, trade surplus and deficit of U.S. trading. Originality/value- This paper will help to build up the understanding about the basic imports, exports and importance of balancing the trade cycle for a country.
Keywords- Deficit, Import, Export, Surplus, Economy
Every country has to follow a set of policies, methods and processes in order to perform imports and exports. A number of conflicts arise due to weak foreign trading policies by countries. It requires professional expertise to manage the trade of a country. There are also a number of conflicts generated between the different countries related to financial decisions of countries. To eliminate the risk involved in financial issues a system of principles, procedures, policies, responsibilities, accountabilities are used by stakeholders. Many of the famous financial scandals are noted in the history occurring at Parmalat, Nortel, and Enron. It has cost a lot of drop in the market, huge loss of saving, loss of jobs and decrease in taxes. The financial scandals have made corporations to learn and practice new methods.
The imports and exports must be managed effectively in order to manage a nation. A nation work on the same principles like an organization but a very huge level. There are a number of departments involved combined together to create a nation. A nation economy is the representation of the nation in the world. Different nations have different currencies and different resources. Some are abundant in resources, some have less resources. For this purpose trading channels are created among countries to manage resources and economy. The balance of trade is done between the different values of imports and exports of a country. The trade concepts are further divided into surplus and deficit.
When the exports are greater than the imports then the country is said to be having a trading surplus. The concept of trading arise with the trade with the other countries. The internal trades are not included in local trades (Shachmurove & Ychanan, 1999). The adjustment process is affected by the industry and trade policies which lead to indefinite allocation of resources.
When the imports are greater than the exports, then it is called trade deficit. The trade deficit is often considered negative for the country economy. The deficit problems arise with the different version of report by U.S. department of commerce of the trade deficit. It can lead to a difference of billions of dollar in the economy. Exports and imports are combined together to balance the trading concept. Exports are usually added in form of expenses. These are the good and services produced in U.S. and sold to other countries.
A simple example can be a car produced in U.S. sold to the Canada resident. Imports the goods and services made in other countries. U.S. imports the products which are not manufactured in local territory. This is can be importing a product as a whole or in parts needed by for different purpose. The foreign trading deficit and surplus plays an important role in economy of a nation. It is also linked with the jobs in a country and it can affect other nations too in the same way. It is utmost important to balance it in a global economic way.
Effects of imports and exports of Economy
Imports and exports have a lot of influence of the consumer and the economy. The today’s economy is dependent on a lot of different products bought by the consumer from all over the world. The imports provide more options to the consumers and help to manage the daily budget. It can generate a lot balance problems to nation economy if the imports are increased then a certain amount. The currency can be devalued too due to a lot of imports. The economic performance is dependent on the currency value. The annual GDP consists of consumer spending, government spending and capital investment. The overall major term is calculated using exports minus imports.
If the number of exports increases than the imports then the export figure would be positive. The positive net exports plays major role in increasing the growth of economy. Increased number of imports means more manufacturing in the industries, which means more jobs and more number of people are employed. Imports on the other parts are considered negative on the economy. The exports also indicate the inflow of cash inside the country. Imports can drag the GDP down (Townsend, 1979).
Effect of Exchange rates
The exchange rates is a complicated concept that derives a relationship between the imports and exports. The exchange rate has also effect on the trade surplus and deficit. A weaker currency will make imports more expensive than the exports and a strong currency will make imports cheaper.
U.S. Exports and Imports top partners
All the data of US exports is managed by the electronic export information except Canada through the automated export system. The filing of electronic information is necessary for the exporting. The Canada exports are managed under a 1987 memorandum of understating signed by the census bureau. The imports data is calculated through the automated custom commercial system. It is also compiled with the warehouse forms, foreign trading zone documents and other documents needed by the border protection agency. Below is US imports exports values according with the regions.