Wednesday, May 23, 2007

US Trade deficit: getting better?




The New York Time article is discussing the trade deficit of the U.S. The U.S. is decreasing the trade deficit and is coming closer to the large gap that they got themselves into.
A trade deficit is when the value of a nation's imports exceeds the value of its exports. For example if a country has more imports then exports it makes the country loose the profit it makes from exporting.
Since the dollar value is weak, the trade deficit is likely to go down in the future. If the value of the dollar decreases, more companies will tend to produce products here and sell them abroad. The country is selling products such as shovels, engines, cars, poles to foreign countries. By having the value of the dollar less then it used to, it allows production to take place in america and not overseas.

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