The US trade data is the difference between imports and exports. More importantly, the deficit is a measure of how much the country exports and how much it imports. It tells us about the strength and weaknesses of our national economy. In economic terms, trade surplus revenue is the difference between receipts and disbursements. That suggests, first, that imports may have exceeded our sales and second, that we must import more to equalize the deficit.
The United States, as a member of the European Monetary Union, has a free trade agreement with Canada, Mexico, and Peru. Tariffs are imposed on imported goods within the customs jurisdiction. Tariffs are used to protect our manufacturers from foreign competitors who would cheat on us by flooding our markets with cheaper goods or products that could lower their prices below the price at which they buy them in the United States. Tariffs are also used to restrict imports from those nations which do not treat our products fairly or that do not have fair trade agreements with our companies.
Imports and Exports
Balance of payments. Trade deficit. Net international investment position. In other words, the balance of payments indicates the difference between the total receipts received and the total exports sent.
Trade deficit
The difference between receipts and exports. Balance of payments. Net international trade agreements.
What are the components of the balance of payments? Net Exports and Domestic Assets. Exports are the value of foreign assets less total imports. Domestic assets are all current domestic resources used for imports and exports. Net exports are the value of foreign assets less total imports minus domestic assets.
Excluded are domestic assets held by non-residents that are not resident foreign nationals. By definition, a domestic asset is “all property and assets which are owned, utilized, and transferred during the course of business by a foreign person who is a national of the United States.” Assets that are held abroad by non-resident aliens are called “excluded assets.”
How are these data collected?
The US Department of Commerce receives international trade data on both the goods imported and exported. From this data, the department’s Bureau of Customs and Border Services (BHS) creates monthly and quarterly statistics of United States-traded goods by economic class and region. The BHS publishes a monthly report called HICP Integrated Customs Goods List (ICVL) based on United States-imported goods in Australia, Canada, Japan, Mexico, the European Union (EU), and South Korea.
There are many components to the MTFD, which are not included in BIS data on current US trade balances. One important component is the balance of payments between the foreign country and its domestic market. Another important aspect of the MTFD is the merchandise imports and exports. Another important component of the MTFD is the treatment of certain goods and services with special provisions for specific countries. Finally, another important component of the MTFD is the treatment of currency-denominated assets and liabilities.
The impact of MTFD on US trade deficit
Most studies on the impact of the MTFD on the US trade deficit focus on the treatment of foreign trade balances. However, the MTFD also affects the balance of payments and the contribution to the balance of payments of the United States. To examine these components of the MTFD, one useful approach is the comparative analysis of the value of the United States dollar against the currencies of the countries that have a large US trade deficit, using trade flows from the countries as a source of data. Another approach is the use of logistic regression to examine the effect of changes in the balance of payments on the value of the US dollar.
The studies that focus on the MTFD mostly come up with mixed results. Some of the studies find no significant relationship between the MTFD and US trade deficit. On the other hand, some of the studies find a fairly strong and positive relationship between the MTFD and the trade balances. These results suggest that the policies that promote MTFD can be effective in reducing U.S. trade deficits, but not to the extent that they are believed to have been effective in reducing import and export deficits. One can easily purchase the US trade data from websites like importkey.com.
