The US trade deficit will increase in the future

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1. Description

In the 1950s and 1960s, the U.S. was the world's leading export powerhouse. During this period, the U.S. ran a substantial trade surplus, of about one percent of Gross Domestic Product. Since the 1970s the U.S. moved from a trade surplus to a deficit position, as Europe and Japan began to compete effectively with the U.S. in a range of industries.

2. Enablers

• Non-tariff barriers to U.S. exports in a number of key foreign markets

• export-led growth strategies in many countries that target American markets because they are the largest and are more open than many others

• Macroeconomic factors such as the over-valuation of the U.S. dollar and slow growth abroad have also played important roles in the 1990s

• most important is a pattern of neglect of the American industrial structure by the federal government

3. Inhibitors

• As the U.S. economy rebounds, receipts will increase

• Weak Dollar will be the major impact to decrease the US trade deficit. For example U.S. firms will be benefited from a weaker dollar that made their products less expensive in overseas markets

4. Paradigms

• Before: the U.S. was the world's leading export powerhouse. . The U.S. also benefited initially from strong export demand in a wide range of industries, from low-tech textiles and apparel to sophisticated aircraft and machine tools

• After: U.S deficit will increase continually. Since many competitive countries like Europe and Japan began to compete effectively with the U.S. in a range of industries. Deficit industry will be high-technology and or high-wage industries that also generated top trade deficits included Computers and office machines and parts, Steel and other blast furnace products and TVs, radios and other electronic equipments.

6. Timing

• From 2010 to 2015 terrorism will be increased. So the deficit will balloon as taxes were decreased to stimulate the economy and government spending will be increased to fight terrorism.

• From 2015 to 2020 U.S dollar will be continually increased. So dollar-overvaluation will cause exploding trade deficits.

7. Web Resources

http://www.epinet.org/content.cfm/webfeatures_viewpoints_tradetestimony

http://gbr.pepperdine.edu/041/devaluation.html