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The United States' Trade Deficit Essay

750 words - 3 pages

These days, almost every country involves in international trading. To set the basic knowledge about international trading, there are two important terms: trade surplus and trade deficit. Trade surplus is when the money amount of export exceeds import, and trade deficit is when trade import exceeds export. U.S. has been stuck with trade deficit for years now and it has caused problems such as lowered U.S. credit, or less favorable trade condition. This is a very complicated problem that it may take long to resolve the problem, but it is not something that is impossible to solve. One of the best solutions to resolve such problems would be increasing in government spending to support domestic goods. (solution not defined yet)

To balance the trade deficit, U.S. has been borrowing money from other countries including its biggest trade partner: China. It is possible to borrow money from many other countries especially when such country like U.S. have other countries trust. However, it is not the same as how it used to be in the past. As a result, U.S. credit which used to be graded at AAA has fallen to AA. At this point, this is not a severe problem because AA is still a stable credit level that U.S. would be able to borrow money from others in the future. However, if U.S. continues to stay in trade deficit and borrow more money every year, then the credit rate will continue to fall and U.S. will have less and less countries to borrow money. With less money borrowed from less countries, the amount of money borrowed would be not enough to balance the trade deficit that U.S. have.
Due to the situation that U.S. being financially aided by the countries may bring less favorable trade system. Over most of other countries in the world, U.S. may be the super-power country that pressures other countries to undergo with trade system that favors U.S. but that is in case of such countries like Greece that is about to collapse its economy or South Korea. In case of South Korea, even U.S. army is staying in South Korea to support its military situation with North Korea. Since South Korea gets aid from...

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