In recent years the world has been facing an import-export imbalance. What does this mean? Well, it means that the United States is buying less from other countries than they are selling to them. As a country that relies on importing and exporting raw materials, this can cause a great deal of problems in the global economy. For example the United States is currently importing oil and gas, while it is exporting products like cotton. This is a major cause for the world trade deficit, which is causing many economic problems including the current state of the American economy.
So what can be done to correct this situation? The first thing that needs to be done is to change the way the United States determines the value of foreign goods that come into the country. Currently the United States looks at the price of the imported product and all of the other factors involved in determining the value of the nation’s goods. However, other countries view things a little differently. For instance a country that is doing well economically might view the price of an imported good as a good indicator of the value of its own products.
Because of this different way of viewing the value of their products the other country is forced to sell its goods at a higher price than the United States does. However, this doesn’t help the consumer of those products. So instead of fixing the price of their products the other country increases its imports and purchases and sells those products at an artificially high price, causing the United States to purchase less. Because it is importing less it has to sell its goods at a higher price to make up for the deficit created by not having enough imported products to balance its purchases.
This is what is being done in the current global economic crisis. However, there is a way to fix this problem. By negotiating with our trading partners we can adjust the current world trade deficit and turn it around so that instead of buying more from other countries we buy less from them. In this way we will be able to increase our economic freedom and re-balance the playing field internationally.
However, there are many ways that we can negotiate our current deficit without necessarily upsetting our trading partners. One way is to implement import export reduction measures. These measures would allow us to reduce the amount of foreign products that we purchase from our trading partners while reducing the amount of goods that we sell to them. In addition, if a country makes a bad decision to increase its imports or exports it can also have an effect on our export performance. The more foreign products that we sell less to them the lower the price of our goods in the United States and this will have a beneficial effect on our gross domestic product growth.
Import export reductions and rebates are one of the easiest ways to open up channels of communication between our trading partners and reduce the current trade deficit. Another great option is to take a hard look at our exports. If we’re not really getting a good deal on our exports in terms of price, quality or duty-free status than we could consider increasing our exports. For instance, if we’re not seeing much of an increase in the price of our exports in recent years because of the weak U.S. dollar and other factors then we could consider increasing our exports. This will result in a boost in our income from this source and offset some of the disadvantages we’ve faced in recent years with our trade deficit.