Thursday, April 14, 2005

"I have always thought the argument that attributed the widening trade deficit to the absence of growth abroad was a bit deceptive, for the simple reason that in aggregate, growth abroad has been quite strong."

We don't trade with the world in aggregate. We trade with our trading partners:

Export partners: Canada 23.4%, Mexico 13.5%, Japan 7.2%, UK 4.7%, Germany 4%

Import partners: Canada 17.4%, China 12.5%, Mexico 10.7%, Japan 9.3%, Germany 5.3%

(2003 figures from CIA World Factbook)

Nations with above average growth represent a small percentage of US foreign trade; nations with below average growth a high percentage, Hence, a widening trade deficit driven by strong US growth.


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