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THe US trade dificit

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Abstract
This script contains information on the situation of the United States regarding the economic development, specifically on the trade deficit on goods. I have defined what trade deficit is and given the significant causes of the situation. In my research, I have obtained information on the consequences of the deficiency on trading activities, and what becomes of the nation. The relationship between the net import of capital and trade deficit is included in the report. Additionally, the trend in a surplus of goods during exportation has been explained, and the relation between the U.S and other nations in trading activities especially after the Second World War. The development of the U.S economically has been highlighted, particularly in 2017 in light to obtaining a solution on the trend in trading activities. Finally, a recommendation based on the leadership of former presidents has been given to finding a lasting remedy of the problem in question.
Introduction
Trade deficit refers to the act of making more imports than exports. The United Nation, for example, has for decades been experiencing a shortage in the trade of goods. There are two major causes of the increasing U.S deficit in trading activities: the continuous increase in the consumption of products by the Americans and the availability of low-priced labor from abroad. The U.S, therefore, has to keep importing capital in massive amounts, from both the governments from abroad, individuals’ as well as businesses, hence making the nation a debtor one.

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A deficit in goods that are traded results in a net import of capital. However, the fact that the two goes hand in hand validates the macroeconomic dimension in accordance to which the balance of a country in goods traded, the stability in capital flows and the balance in trade of services must all sum to zero. This, therefore, means that in case the trading of goods and services is in deficit, the capital inflows must be equally positive. Although the trade deficit results in capital inflow, the inflow in the capital could also possibly cause the trading deficit. The last time that a persistent and sizable goods trade surplus was run in America was during the exportation of a large amount of capital to Europe to support the Marshall Plan after the end of the Second World War.
To wrap it all, the U.S economy grows at 3%-4% yearly, with almost zero structural joblessness, hence in 2017, the economic growth made the capital surplus wide, and the goods deficit also raised higher (Chinn, 454). If president Trump has an objective to reduce the trade deficit in goods, he should consider the actions of President Jimmy Carter as well as W. Bush, and act contrary to them. In 1971, these two presidents succeeded in dropping the goods trade deficit, by taking over a U.S economy doing very well and leaving it worse than it initially was. In my view, this is not the type of sacrifice that President Donald Trump would wish to make economically.
Work Cited
Chinn, Menzie D. “Incomes, exchange rates and the US trade deficit, once again.” International Finance 7.3 (2004): 451-469.

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