Discussion Responses Required

Discussion Board 1: Top United States Global Trading Partners

Liberty University

Corbin A. Weeks

BUSI 604-B14

Key Phrase

I have chosen to research the U.S.A’s Top Global Trading Partners because of the recent

attention brought to the subject by the President of the United States. I have always had a good

understanding of the importance regarding global trade, but with recent controversy, the trading

system as we know it may be completely changed on an international scale. I also teach Business

at Mulberry High School (FL), which is very diverse in culture and race. I want to make sure that

I provide my students with relevant and accurate information as they begin to enter the

workforce in different areas.

Explanation of the Key Phrase

Since the early 1930’s, the United States of America has steadily increased its global

commerce year after year. The United States Census Bureau collected data that shows

approximately 15 countries make up almost 75% of the American import/export business.

Among those 15 countries, Canada, China, and Mexico are the three top international commerce

partners. It is important to understand where products come from and how outsourcing plays a

crucial role in our economy. The three reasons international trade is important to the United

States are as follows: maximizing production and efficiency, increasing market audience, and

receiving foreign investment (Satterlee, 2014).

Major Article Summary

In the article China-US Trade: A Global Outlier, Willem Thorbecke analyzes the outlines

of the countries trade agreements. There has always been speculation around the trade deficit

with China that politicians and government officials just can not seem to understand. What most

people do not know is that between 2006 and 2014, the trade deficit with China actually

increased by 45% while the trade deficit between the United States and all other countries

decreased by 40% (Thorbecke, 2014, p.1). The main imports and exports that reflect these

numbers are oil and gas, agricultural products, and mechanical/electrical products. According to

the Office of the United States Trade Representative- Executive Office of the President, United

States exports with China were $169 billion, and imports totaled $479 billion. These numbers

reflect the differences in outsourcing, labor costs, advertising, and all of the driving forces that

people seek to save money. Every day American companies are sending their products overseas

because they can not afford production in the United States. Though working conditions and pay

are significantly lower in Asia, companies seek the maximum value of the dollar.

In the second part of the article, Willem Thorbecke uses a Gravity Model to explain

China’s exports. He explains how the trade flows are directly correlated with the GDP (Gross

Domestic Product), how trade costs are calculated, and even how a third country’s participation

will change the dynamic of the trade agreements financial structure. While digging through the

roots of the article, Willem Thorbecke made a crucial statement in regards to monetary gaps

between the United States and China, “This gap could reflect the role of global value chains,

since China imports parts and components from other East Asian countries and exports final

goods to the rest of the world” (p.1).

Discussion

The Chinese-United States trade deal surpasses any other global trade deal on an

international scale. Though the United States has many other trade partners, the Chinese are the

most popular amongst the American people. I remember growing up with toys that read “Made

in China” and even owning an American flag that read “Made in China”. This week, I really

wanted to focus my attention on a specific country that has a significant impact on everyday life.

A common topic of discussion in the American culture is the deficit that is owed to China, which

always intrigues me. We, as Americans, need to figure out ways to cut outsourcing and aim to

even the playing field with the imports/exports. This was the first time that I engaged in deeper

thought about the United States global trade partners and it really opened my mind up to question

what is to come in the future.

All of the works that I found seem to go hand in hand with one another. As previously

stated, I wanted to focus on the trade agreements with China as I began my research. Another

interesting factor that caught my attention was that China and the United States have been in a

legal battle for years with the laws of the World Trade Organization (WTO). I ponder how these

two nations have been fighting legal battles for so long, but continue to act in billion dollar trade

deals that create more deficit (Loridas, 2011). The other works cited make cases for the monetary

statistics between the two countries and where the trade deals are going. I feel that neither

country could function holistically without one another. With shortages of fruit, vegetation, food,

and other resources from Asia, I understand that the United States can not function on its own

domestic products.

References

Cherniak, Cyndee Todgham, et al. "Canada-United States trade policy beyond North America."

Canada-United States Law Journal, Spring 2010, p. 437. LegalTrac.

Clark, D. P. (2010). Intra-Industry Specialization in United States-Mexico Trade. Global Economy

Journal, 10(2). doi10.2202/1524-5861.1636

Loridas, K. (summer 2011). United States-China Trade War: Signs of Protectionism in a Globalized

Economy? Suffolk Transitional Law Review, 34.2 , 403.

Thorbecke, W. (2015). China–US trade: A global outlier. Journal of Asian Economics, 40, 47-58. doi:

10.1016/j.asieco.2015.09.001

Zeng, K. (2012). High stakes: United States-China trade disputes under the World Trade Organization.

International Relations of the Asia-Pacific, 13(1), 33-63. doi:10.1093/irap/lcs014