Checking In On Trade

The U.S. has run a trade deficit (importing more goods and services from 
other countries than it exports) since the mid-1970s, which acts as a drag on 
overall gross domestic product (GDP) growth [Figure 1]. Although the trade 
deficit narrows during recessions, when imports typically fall faster than exports,
the trade gap has increased over time, and currently stands at around 3.0% of
 GDP. Along with the massive budget deficit, the trade deficit is one of the major
 economic challenges facing the U.S. and has fostered the oft-repeated conventional 
wisdom that “we don’t make anything in the U.S. anymore.” What’s missing from
 this assessment, however, is the role of the U.S. as a net exporter of services and
 the increasing value of “good old American know-how.” Here we focus on the 
details of what we import and export, and the impacts on the U.S. economy.

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