The United States’ Trade Imbalance

Topic: Trading
Words: 522 Pages: 2

The U.S. trade imbalance has topped $1 trillion as Americans purchase more toys, computers, and pharmaceuticals. The record deficit increased imports relative to exports. The imbalance has also made the U.S. increasingly reliant on China for consumer products (Swanson, 2022). Businesses and governments are buying equipment and machinery from low-cost nations to counteract increasing energy prices. Rising overseas demand has disrupted the American supply chain, making exports difficult. The trade imbalance has allowed the U.S. to import more low-priced foreign items, cutting the cost of energy production in domestic sectors. The excess also prevents a commodities shortage.

Relevance to Households

The trade deficit reduces the income of American domestic workers, pushing many workers into lower income brackets, and causing challenges in savings. The imbalance has also affected the employment opportunities of citizens working in manufacturing industries, which are closed down if the country is forced to import rather than manufacture consumer goods (Swanson, 2022). This has forced the citizens to reduce their spending on recreational services, travel, furniture, food, and movies. Massive imports of consumer products from low-wage nations exert downward pressure on U.S. hourly pay rates, lowering labor’s negotiating strength with multinational corporations. If import prices increase, U.S. corporations must decrease employee pay to lower labor expenses while they spend more on raw materials (Swanson, 2022). Americans may import inexpensive high-tech devices, equipment, and machinery from China and Korea. The imbalance also allows access to more items at low prices and employment possibilities in multinational corporations.

Relevance to Business

Businesses spend more on equipment and machinery, raising the entire budget and resulting in overpricing of imported items. Overpricing harms consumer affordability. American firms argue that import taxes are too high, hurting their ability to import. American firms have struggled with dumping and subsidizing items that violate U.S. rules, resulting in significant losses in importation (Swanson, 2022). Businesses struggle with counterfeit products from low-wage nations, undermining health and safety norms—fake and dumped products damage U.S. and worldwide trade agreements. Besides, businesses may acquire the most modern technology from other nations, boosting technology adoption and integration. Businesses may access a well-trained and sophisticated labor force to integrate technology into their industries (Swanson, 2022). Furthermore, companies can develop ties with other global firms, strengthening trade relations and thereby discovering a suitable market for their goods, where they may sell their products in the case of a trade balance.

Relevance to Government

The trade imbalance causes poor manufacturing owing to high import costs and unsustainable foreign debt burdens. The imbalance has lowered foreigners’ travel and education expenditures. The imbalance has also lowered the dollar’s value relative to international currencies like the pound, hurting U.S. and foreign trade agreements (Swanson, 2022). The imbalance has cost the government employment and hampered long-term trade competitiveness. The trade deficit has helped the government purchase inexpensive equipment from China and innovative technology from Korea. The imbalance has also helped the U.S. build stronger connections with other nations, boosting peace and prosperity. The mismatch ensures that the U.S. consumes more than it produces, creating a surplus and reducing commodities shortages (Swanson, 2022). A more significant trade surplus increases a country’s GDP.


Swanson, A. (2022). The U.S. trade deficit soared to a record last year. The New York Times. Web.

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