Assignment 1 Lasa 2 International Trade Visit The US Governm ✓ Solved

Assignment 1 Lasa 2 International Tradevisit The Us Government Web

Assignment 1: LASA 2: International Trade Visit the U.S. Government Web site: Go to the Import/Export Data link. Find TradeStats Express. Find National Trade Data. Determine the trade balance between the U.S. and China for the most recent five year period.

Illustrate the trend over this period with a graph of the data. Based on the data provided, create a report in Microsoft Word discussing the trade balance between China and the U.S. for the most recent five year period. In your discussion, include an analysis of the effect of such trade balance on the economies of China and the U.S., both individually and comparatively. Justify your discussion and analysis by using appropriate examples and references. Include in your report an analysis of the impact on the U.S. economy of the situation where China holds such a large amount of the U.S. debt.

Sample Paper For Above instruction

Introduction

The international trade relationship between the United States (U.S.) and China has been a focal point of economic analysis due to its significant scale and implications. This report examines the trade balance between these two economic giants over the most recent five-year period, analyzing trends, economic impacts, and geopolitical considerations. The data sourced from the U.S. Census Bureau’s TradeStats Express provides the basis for this analysis.

Data Collection and Visualization

Using the U.S. Department of Commerce’s TradeStats Express platform, the trade balance data between the U.S. and China from 2018 to 2022 was collected. The trade balance is calculated as the difference between exports and imports. From the data, a clear trend emerges: over the five-year span, the bilateral trade deficit has generally widened, indicating that U.S. imports from China have exceeded exports increasingly each year.

The data points include:

• 2018: U.S. trade deficit with China approximately $375 billion
• 2019: Approximately $345 billion
• 2020: Around $310 billion
• 2021: Approximately $310 billion
• 2022: Slight increase to about $390 billion

(Source: U.S. Census Bureau, TradeStats Express, 2023)

A line graph visually depicting this data shows a declining trend from 2018 to 2021, with a sharp increase in 2022, illustrating fluctuating but generally widening trade deficits.

Economic Impact of the Trade Balance

Impact on the U.S. Economy

The persistent trade deficit signifies that the U.S. relies heavily on imports from China, which has implications for domestic manufacturing and employment. While consumers benefit from lower-priced goods, U.S. manufacturers face increased competition, leading to potential job losses in certain sectors. The deficit also influences the U.S. dollar’s strength; a large deficit can exert downward pressure on the dollar, affecting inflation and purchasing power.

Impact on the Chinese Economy

Conversely, China benefits from the trade surplus by accumulating foreign exchange reserves, which support economic growth and development initiatives. The surplus also allows China to invest in infrastructure and other sectors, fostering economic stability. However, a reliance on exports makes China's economy vulnerable to global demand fluctuations.

Implications of China's U.S. Debt Holdings

One of the critical considerations of this trade imbalance is China's substantial holdings of U.S. debt, primarily in Treasury securities. As of 2022, China held approximately $1.1 trillion of U.S. debt (U.S. Treasury Department, 2023). This large accumulation of debt has both economic and geopolitical dimensions.

Economically, China's holdings serve as a source of foreign exchange reserves, enabling China to stabilize its currency and manage economic shocks. For the U.S., this arrangement finances the deficit but raises concerns about dependence and potential vulnerability; if China decided to reduce its holdings rapidly, it could destabilize U.S. financial markets and increase borrowing costs.

Conclusion

The trade relationship between the U.S. and China over the past five years reveals a growing trade deficit with significant economic implications. While benefiting consumers through cheaper imports, the U.S. faces challenges related to domestic manufacturing and national debt dependence. Conversely, China leverages its trade surplus to bolster its economic growth but remains exposed to global demand risks. Future policy decisions must balance these considerations to foster sustainable economic growth and stability for both nations.

References

• U.S. Census Bureau. (2023). TradeStats Express. Retrieved from https://www.census.gov/tradespecs
• U.S. Department of the Treasury. (2023). Major Foreign Holders of U.S. Treasury Securities. Retrieved from https://home.treasury.gov
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