International Trade & Investment
Much of what Americans know about the role of the United States in the global economy is based on the BEA's statistics on international trade and investment. The BEA (Bureau of Economic Analysis) conducts its own research on multinational enterprises and international trade in services. Data from the Census Bureau, Customs and Border Protection, Treasury, and other federal agencies are also important in the preparation of the BEA's international statistics.
US negotiators use these statistics when negotiating trade deals with other countries. These numbers inform Congress and other politicians about trends affecting American business, economic growth, and jobs. They help companies understand the changing US and global markets and make investment and employment decisions.
What is the Balance of U.S. Trade?
The US balance of trade is the difference between the value of goods and services that the US exports to other countries and the value of goods and services that the US imports from these countries. A positive balance of trade, also known as a trade surplus, means that the United States exports more than it imports. A negative balance of trade, also known as a trade deficit, means that the United States imports more than it exports.
The U.S. balance of trade is influenced by many factors, including exchange rates, trade policy, economic growth, consumer preferences, and global supply chains.
Balance of Trade (BOT) is a measure of a country's exports relative to its imports. It indicates whether a country has a trade surplus or a trade deficit in a given period. A trade surplus occurs when exports exceed imports, and a trade deficit occurs when imports exceed exports. The balance of trade is a component of the current account, which also includes income from foreign investments and remittances.
The United States has had a steady trade deficit since 1976 due to high imports of oil and consumer goods. In 2022, the largest trade deficit is recorded with China, Mexico, Vietnam, Canada, Germany, Japan and Ireland, while the largest positive trade balance is recorded with the Netherlands, Hong Kong, Brazil, Singapore, Australia and the United Kingdom. Canada is the top trading partner, accounting for 15% of total trade, followed by Mexico (14%) and China (13%).
The US trade deficit narrowed to a 4-month low of $64.2 billion in March 2023 from $70.6 billion in February, versus market forecasts of 63, 3 billion dollars. Exports rose 2.1% to $256.2 billion, helped by sales of crude oil, heating oil, natural gas, autos and tourism, while sales of non-monetary gold and transportation fell. Meanwhile, imports fell 0.3 percent to $320.4 billion, while purchases declined in semiconductors, electrical equipment, earthmoving equipment, gasoline and heating oil, organic chemicals, sales, and sales. sales of telephones and other household products as well as vehicles. On the other hand, imports of finished metals, pharmaceuticals and tourism increased. Combined with the first quarter, shortages of goods and services fell by $77.6 billion, or 27.6%, compared with the same period in 2022.
Trade balance affects the economic growth and stability of a country. A trade surplus can increase national incomes and employment, while a trade deficit can decrease them. Trade deficits can also lead to lower exchange rates and higher inflation if financed by borrowing from foreign lenders. However, some economists argue that a trade deficit is not necessarily bad if it reflects higher demand for imported goods and services that improve the welfare of consumers and businesses.
Trade in Goods and Services
Monthly trade in goods and services between residents of the United States and residents of other countries. Sales in the US are exports and purchases in the US are imports. The difference between exports and imports is the balance of trade.
The international account (also known as the balance of payments) is a statistical report of economic activity between residents of the United States and residents of other countries, divided into three accounts: the current account , financial accounts and financial accounts.
The current account includes exports and imports of goods and services, income from U.S. property and investments abroad, and income from property and investments in U.S. real estate. abroad in the United States. This also includes employee benefits, US government benefits, and personal cash transfers. The current account is like the profit and loss account of the entire US economy. The current account balance, calculated as exports of goods and services plus income received minus imports of goods and services and income expenditure, is a common economic indicator.
Capital account mainly reflects capital mobility, i.e. B. write off debt and pay for disaster-related insurance. Financial accounts reflect investment flows between the United States and other countries. These cash flows may take the form of U.S. deposits with foreign banks, loans to foreign individuals, purchases of foreign stocks and bonds, or financing of foreign subsidiaries of the United States. US multinational companies. Transactions by foreigners with U.S. banks, on U.S. financial markets, and with subsidiaries of U.S.-based foreign transnational corporations are recorded in a similar manner.
International trade statistics are best known for recording the "balance of trade". This is the difference between US exports (selling goods and services to residents of other countries) and US imports (buying goods and services by residents of other countries).
For services such as wholesale and retail, finance and insurance or information services, it is important to be close to the customer. As a result, many international companies offer their services through subsidiaries located in or near foreign markets. Collecting data on these companies enhances understanding of the international service market.
Trade in goods and services: Imports, Million US dollars, 1970 – 2022
Trade in goods and services is defined as the transaction of goods and services between residents and non-residents. It is measured in million USD at fixed 2015 PPP prices as a percentage of GDP in net trade and in annual growth in exports and imports. All OECD countries aggregate their data according to the System of National Accounts (SNA) 2008.
Trade in goods and services Exports, Million US dollars, 1970 – 2022
International Investment Position
International Investment Positions accounts represent the statistical balance between the United States and the world, and show the total value of U.S. financial assets held in other countries and its liabilities. United States to residents of other countries at the end of each quarter. The difference between assets and liabilities represents the net international investment position of the United States.
This video shows the Most Poweful Economies in the World, based on nominal GDP, between years 1980 and 2026. Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health.
Most Powerful Economies in the World (1980-2026)
The data is broken down into investment categories such as direct investments, portfolio investments and reserve assets, each with extensive details available. Understanding the types of investments held by foreign owners can provide insight into the vulnerability of the U.S. economy to changes in external market conditions.
Direct Investment by Country and Industry
When a foreign investor owns at least 10 percent of the shares in a U.S. company, it constitutes a foreign direct investment, which implies significant foreign control or influence over a U.S. company. with US companies. Similarly, a U.S. foreign direct or foreign investment is a U.S. investor who owns at least 10 percent of the shares of a foreign company. Private equity data includes transactions between the companies involved and their owners, the income earned by the investor from the private equity investment, and the total value or position of the private equity investments. domestic and foreign private equity investments.
Investment by Sector
Investments by sector include households, businesses and the government in general. For the government, this often means investing in research and development, military weapons systems, transportation infrastructure, and public buildings like schools and hospitals. Under SNA 1993, military capital expenditures are considered total fixed capital only if they can be used for civilian productive purposes (e.g. airports, docks, roads, etc.). In the 2008 System of National Accounts (SNA), all military spending on fixed assets is considered gross capital formation, regardless of its purpose. This indicator is measured as a percentage of the total fixed capital formed. All OECD countries aggregate their data according to the System of National Accounts (SNA) 2008.
Investment by sector: Household, % of GFCF, 1990 – 2022
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