U.S. exports increase, trade deficit decreases

by:Yourijiu     2021-08-27
The ever-widening trade deficit has been the top problem plaguing the U.S. economy in recent years. Some analysts now propose that increasing foreign demand and the continued depreciation of the U.S. dollar may gradually narrow the US trade deficit starting from the second half of this year. An article in the US 'Business Week' pointed out that the economies of Japan and Europe have come out of a long-term downturn, and the resulting increase in demand is the United States... The growing trade deficit has been the top problem plaguing the US economy in recent years. Some analysts now propose that increasing foreign demand and the continued depreciation of the U.S. dollar may gradually narrow the US trade deficit starting from the second half of this year. An article in the US 'Business Week' pointed out that the economies of Japan and Europe have come out of a long-term downturn, and the resulting increase in demand is the main reason for the surge in US exports; in addition, the weakening of the dollar since the beginning of 2002 has also helped curb the trade deficit. The rise. Although it is difficult to expect an immediate reduction in the US trade deficit, the continuous increase in exports will at least ease the trade deficit. According to a report released by the US Department of Commerce on May 25, US exports of goods and services increased by 14.7% in the first quarter of this year, significantly higher than the original estimate of 12.1%; imports increased by 12.8%, slightly lower than the original estimate of 13%. The shrinking trade deficit is also one of the reasons why the economic growth rate is higher than originally estimated. In the first quarter of this year, the US economy grew at an annual rate of 5.3%, which was higher than the original estimate of 4.8%. It was even greater than the 1.7% in the fourth quarter of last year. It was the fastest growing quarter since the third quarter of 2003. Many analysts predict that the US economic growth rate will reach about 3.5% this year. Analysts pointed out that since the current US import value is 50% higher than the export value, only if the export growth rate is 50% higher than the import growth rate, the trade deficit will not increase further. This means that if exports of goods and services continue to grow at a rate of 12% this year, the growth rate of imports cannot exceed 8%. From another perspective, the improvement of the international economic environment makes it no longer a problem for the United States to increase exports. The latest report of the International Monetary Fund predicts that the global economic growth rate will reach 4.9% this year, higher than last year's 4.8%. In the past year, Europe and the Pacific Rim have contributed nearly 50% to the growth of U.S. exports, and China has become an important destination for U.S. exports. Although China accounts for only 5% of the total U.S. exports, 12% of the growth in U.S. exports in the past year came from exports to China. Economists said that the U.S. government has adopted a tacit attitude toward the devaluation of the U.S. dollar. Although it knows that this approach involves risks, it still hopes to reduce the U.S. huge trade deficit. Princeton University economist and former Federal Reserve Vice Chairman Alan Blind said that without a significant depreciation of the U.S. dollar against most currencies, it is difficult for the United States to reduce its trade deficit to a manageable level. Economists generally predict that the U.S. dollar will further depreciate because the market feels that the Fed will stop raising interest rates soon, and the European and Japanese central banks will raise interest rates in the near future.
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