This is Mary Walden with economist MW welcoming you to the economic perspective. Today’s program looks at the persistence of the trade gap. Mike, one objective of the various trade disputes between the US and other countries has been to reduce our trade gap. A trade gap occurs when the US buys more products from other countries than we sell to them. We have now been engaged in changing the rules of international trade for a couple of years. Have we yet seen any reduction in the trade gap?
- No – indeed according to the most recent measures, the gap increased
- A big reason – importing of consumer products, especially technological products like cell phones
- Best that can be said is that the rate of increase in the trade gap has slowed in the last two years
- There are two opposing responses to this information
- One – that we are still hooked on foreign made products – will only change when we make those products in the US
- Alternatively, some say the trade gap numbers are phony – if a product is assembled in a country – counts as being made there, even if the parts and development come from elsewhere
- So, a continuing debate
- I’m MW
And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.