A container ship docks near loading cranes at Port Everglades in Florida.
In the past 30 years, exports have far exceeded imports in the U.S. The country exports tons of raw materials and imports tons of finished goods, resulting in a significant trade imbalance. Meanwhile, the U.S. borrows money from abroad for financing its deficit. To help repay the debt, economists advocate producing more goods and services for export. The declining value of the dollar stimulates trade prospects. But the rising cost of petroleum makes progress difficult. Many theories have been proposed to fix this trade imbalance.
Instructions
1. Increase U.S. exports. Study U.S. exports -- the products the U.S. produces and markets well internationally, such as high-tech, expensive items. America exports agricultural commodities, aircraft and specialized industrial machines. Since America does well with high-tech exports, consider increasing exports by creating new high-tech products. Support research and development.
2. Study U.S. imports -- products the U.S. does not produce very economically, such as consumer goods. The hottest import items include cars, clothing and televisions. When the U.S. imports tons and tons of finished products, big trade deficits materialize, because finished goods cost more per pound than raw materials.
3. Consider the effects of supply and demand. There is not enough demand for American-made products abroad. The Street website states that every trade deficit dollar ( every dollar the U.S. spends on imports that is not reciprocated by a country buying U.S. exports) converts into purchasing power lost to America. Each of those dollars could create jobs instead. Cutting the U.S. annual trade deficit ($525 billion) in half would create 5 million jobs in the United States, according to The Street website.
4. Make legislative changes that fix the trade imbalance. Reconsider the possible benefits of a previously proposed legislation, the Balance of Trade Restoration Act of 2006, which never became law. It did not violate U.S. agreements with the World Trade Organization. It proposed the use of a system of tradeable certificates. This Act is a dead issue now, but it represents a starting place that Congress could use for reconfiguring a new legislative proposal.
5. Reduce U.S. dependence on foreign oil. The more oil the U.S. must import and the higher oil prices the U.S. must pay, the larger a trade deficit quandary the country encounters. Encouraging U.S. acceptance of alternative energy sources such as solar, wind or geothermal, for example, would help reduce the dollar volume of U.S. exports.
