University:
Baltimore City Community College
Course:
ECO 201 | The American Economy I: Macroeconomic Theory
Academic year:

2024
Views:

238

Pages:

2
Author:

Danny A.

U.S. International Trade In 1988, the total dollar value of U.S. merchandise exports amounted to over $300 billion. Exports helped drive the U.S. economy toward full employment in the late 1980s and provided a livelihood for hundreds of thousands of workers. In 1988, the United States imported nearly $450 billion of merchandise from foreign lands, allowing U.S. businesses and households to enjoy and use materials, supplies, and goods produced abroad. As you will see, international trade is a two-way street— not only in the sense that it involves exchange of goods among nations, but also because it allows mutual gains to the trading partners. Let's begin our discussion of U.S. international trade by examining what the United States exports and imports. Merchandise: What the United States Exports and What It Imports The pie charts in Box 1 shows the composition of merchandise exports and imports for the United States in 1988. Let's look at exports first. We usually think of international trade in terms of consumer goods. However, the bulk of international trade is for machinery, equipment, and various industrial materials and supplies such as chemicals and parts. In 1988, imports of capital goods (excluding automotive items) accounted for more than one third of U.S. exports. Industrial materials and supplies accounted for slightly more than one fourth of U.S. exports. These exports of capital goods and industrial materials were used by foreign producers to manufacture a variety of items, some of which were eventually imported by the United States. Agricultural products accounted for nearly 12 percent of U.S. exports in 1988 and automotive products (cars, trucks, and parts) accounted for another 10 percent of exports. The remaining 17 percent included a variety of other products consisting of miscellaneous manufactured items such as audio equipment, clothing, and soft drinks. Now look at the pie chart showing the composition of merchandise imports. As in the case of exports, a major component of our imports consist of capital goods and industrial materials and supplies. Capital goods accounted for nearly one quarter of our imports in 1988 while industrial materials and supplies accounted for about a fifth. We also imported a significant amount of petroleum products, some of which were used by consumers to heat their homes and run their cars, and some of which were used by industry and agriculture to run machinery and equipment and to heat plants and offices. In 1988, imports of automobiles and other automotive products amounted to one fifth of total imports. The remaining imports consisted of many different kinds of manufactured items that you, your family, and your friends purchase almost every day: electronic equipment, shoes, and food products.