In general, most economists conclude the trade deficit stems largely from U.S. macroeconomic policies and an imbalance between saving and investment in the economy. Economists also conclude that trade creates both economic benefits and costs, but that the long-run net effect on the economy as a whole is positive.

The U.S. trade imbalance jumped to a record $74.4 billion in March. The deficit with China increased 22%, while the shortfall with Mexico rose 23.5%. Surging demand for foreign-made goods is pushing the shortfall.

Year-to-Date Deficits

In the simplest terms, a trade deficit occurs when a country imports more than it exports. A trade deficit is neither inherently entirely good or bad. A trade deficit can be a sign of a strong economy and, under certain conditions, can lead to stronger economic growth for the deficit-running country in the future.

The five main reasons international trade takes place are differences in technology, differences in resource endowments, differences in demand, the presence of economies of scale, and the presence of government policies.

Successful strategies to help developing countries boost exports

• Creation of duty drawback schemes.
• Increasing the availability of credit.
• Simplifying regulation.
• Improving cooperation among economic actors.
• Combining short-term and long-term export growth policies.

A trading strategy is a systematic methodology used for buying and selling in the securities markets. A trading strategy is based on predefined rules and criteria used when making trading decisions. A trading strategy may simple or complex, and involve considerations such as investment style (e.g., value vs.

However, the following recommendations may be instrumental in minimizing cultural differences in international business encounters:

• Cultural awareness.
• Accept that cultural differences are as common as individual differences.
• Develop a sense of cultural heterogeneity.
• Be flexible but retain your own identity.

Free trade means that countries can import and export goods without any tariff barriers or other non-tariff barriers to trade. Essentially, free trade enables lower prices for consumers, increased exports, benefits from economies of scale and a greater choice of goods.

Trade improves productivity in three important ways. First, imports expose domestic firms to greater competitive pressure, while giving them access to more and better inputs. Second, exporters increase productivity by learning from overseas customers and through exposure to competition from foreign producers.