The United States in the Global Economy
THE UNITED STATES IN THE GLOBAL ECONOMY
Even on a wilderness backpacking trip, Americans are not leaving the world behind.
of backpacking equipment may be imported, not to mention the vehicle used to arrive at the
trail, the coffee they sip, etc.
Many “American” products are made with components from abroad or are manufactured
For example, the Chevrolet Lumina is made in Canada; the Gerber baby food company
is owned by a Swiss company; Burger King is owned by a British corporation.
component parts of many “American” products are manufactured abroad.
Several economic flows link the U.S. economy with the economies of other nations.
These linkages are
Goods and services flows
Capital and labor (resource) flows
Information and technology flows
U.S. and World Trade
Table 6.1 gives an index of the importance of world trade to several countries, based on
their exports relative to total output.
Figure 6.2 reveals the growth in U.S. imports and exports over past decades.
exports and imports are 11 percent and 16 percent of GDP, respectively, which is more
than double their importance of 25 years ago.
The U.S. is world’s leading trading nation measured in total volume of trade, but not
relative to its GDP.
The U.S. share of total world trade has diminished from a post-
World War II level of one-third of total trade to one-eighth today.
U.S. depends on imports for many food items (bananas, coffee, tea, spices); raw silk,
diamonds, natural rubber, much petroleum.
On the export side, agriculture relies on foreign markets for one-fourth to one-half of
sales; chemical, aircraft, auto, machine tool, coal, and computer industries also sell major
portions of output in international markets (see Table 6-2).
The U.S. has a trade deficit in goods.
In 2002, U.S. imports exceeded exports of goods
by $484 billion.
While we have a deficit in goods trade, U.S. export of services exceeds the import of
services by $49 billion.
The U.S. imports some of the same categories it exports.
computers, chemicals, and semiconductors.
(See Table 6-2.)