Trade Gap Defies Expectations

Abstract

Most economist view trade as an integral part of the free market system. The United States economy is currently running a trade deficit, an excess of imports over exports. The U.S. trade deficit widened much more than expected in June. The whole topic of trade must be viewed from a total picture, not just a segment or portion of the issue. This paper will analyze the current position of the trade deficit and some of the factors that have caused the gap to expand.

Trade Gap Defies Expectations

Introduction

Most economist view trade as an integral part of the free market system. “Trade allows specialization and division of labor and thereby promotes technological growth” (Colander, 2004, p. 414). The United States economy is currently running a trade deficit, an excess of imports over exports. This shortage is currently being financed by the selling of assets such as stocks, bonds, and real estate. The balance of trade has been