The United States is the largest economy in the world. In 2017 its total trade amounted to $5.2 trillion – $2.3 trillion in exports and $2.9 trillion in imports of both goods and services. Over the years, the USA has created a competitive environment for entrepreneurs and businesses thanks to a number of fiscal advantages, including tax breaks, tax deductions and absence of federal consumption tax. The country has built its economic superpower on convenient infrastructure and an abundance of natural resources such as crude oil, gas and agricultural products. But it is safe to say that the biggest US export commodity is the unlimited innovation in the fields of technology. All that makes the country top exporter of fuel, cars, vehicle parts, aircrafts, agricultural products, as well as computers and consumer electronics. 4 US companies – Walmart, multinational operator of supermarket chains; Berkshire Hathaway, real estate conglomerate; Apple, modern technological corporation and ExxonMobil, oil and gas company – made it to the top 10 companies featured in 2017 Global Fortune 500 ranking, which only shows the world that the US economy is the force to be reckoned with. The USA maintains trade relations with multiple countries in Europe, but it is Mexico, Canada and China that play crucial part in its import and export.
In 2017, the USA exported $115 billion worth of products and services to China. Main export commodities included soybeans, aircrafts and cotton. On the other hand, China’s imports to the US include consumer electronics and food products. Growing economy of this Asian country is in demand for recycled scrap materials, which creates new market opportunities for the USA. However, it has been recently announced that the USA is trying to impose 25 per cent tariffs on Chinese imports in protest against alleged intellectual property misuse. Planned tariffs are mostly aimed at Chinese tech, machinery and aerospace industries and are said to target $50 billion worth of commodities. US President’s controversial political and economic decisions have already taken its toll on financial markets worldwide, causing distress on global stock exchanges. In this equation, though, the power of China cannot be underestimated, as The Chinese Ministry of Commerce announced that it is planning to retaliate with 25% tariffs on US exports affecting 106 products, including America’s top export commodity, soybeans.
Top export destinations of the USA also include Canada and Mexico, bound by the North American Free Trade Agreement (NAFTA) signed by the three countries in 1994 to establish world’s largest free trade zone and build a long-lasting and inclusive trade culture. Since then, NAFTA aided competitiveness on cross-border markets and provided measurable benefits for businesses, manufacturers, employees and disadvantaged communities. Considering this, it is somehow surprising why President Donald Trump would want to jeopardise its trade relations with Canada. Recently, he got into an argument with Prime Minister Justin Trudeau by claiming that the USA has $12 billion trade deficit with its northern neighbour. However, it quickly turned out that this figure refers only to trade deficit in goods. In fact, the USA recorded total trade surplus of $12 billion, thanks to $24 billion earned through trade in services. Bilateral trade agreement between the two countries comprises of trade in goods, as well as trade in services, therefore it is unreasonable to treat each of the figures separately. False claims maintained by President Donald Trump have already caused some tension on USA-Canada frontline and may have far-reaching consequences for countries’ interconnected supply chain.jackfrenson