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Trade in the Contemporary World

The United States: a core economy shaping world trade

  • 3 things to know
  • Component 02

Overview

Recall questions on the United States as a core economy, its main trading partners, exports and imports, its persistent goods deficit and services surplus, the dollar as reserve currency, the World Trade Organization and blocked dispute settlement, tariffs on China, bilateral deals, agricultural subsidies, and the challenges and opportunities of its trade position.

What you need to know

Answer each one before you reveal it.

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Key term

Explain how the dollar's role as the world's reserve currency gives the United States trading power.

Key term

Name the three largest trading partners of the United States.

Key term

Describe the main components of United States merchandise exports.

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What makes the United States a core economy within the global trade system?

    Model answer

    It has the world's largest economy and consumer market, the leading international currency, and the power to set rules and standards that other countries must meet in order to sell into it.

  2. 2

    Name the three largest trading partners of the United States.

    Model answer

    Canada, Mexico and China are its three largest trading partners.

  3. 3

    Describe the main components of United States merchandise exports.

    Model answer

    Aircraft, machinery, vehicles, crude oil and refined fuels, chemicals, medical equipment and farm products such as soybeans and maize.

  4. 4

    What kinds of goods dominate United States merchandise imports?

    Model answer

    Consumer electronics, vehicles, machinery, clothing and pharmaceuticals, mostly manufactured in Asia, Mexico and Europe.

  5. 5

    What is a trade deficit?

    Model answer

    A trade deficit occurs when the value of a country's imports exceeds the value of its exports over a given period.

  6. 6

    Explain why the United States runs a persistent deficit on merchandise trade.

    Model answer

    Americans consume more than the country produces, the strength of the dollar makes imports cheap, and much manufacturing has been offshored to lower-cost countries.

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