Trade Deficit & Trade Surplus
What Can Cause a Trade Imbalance?
- Comparative Advantage of one country vs. another (Technology)
- Specialization by one Country
- Mercantilism Trade Practices
- Monetary Policy (inflated / deflated cost structure)
United States Trade Deficit
- The previous Trade Surplus in the US was in 1975
- The US has entered a 43 plunge of rapidly growing trade deficits since 1975 (circa 2018)
- Increased job offshoring and lower wages
- May be caused by Kenseyan Monetary Policy and the Era of Dirty Float
- The majority of the trade imbalance is from 10 countries (2018):
- US Trade is fairly balanced with the other 130+ countries combined (92% as of 2018)