The United States merchandise trade deficit has grown tremendously over the past twenty years. The most direct reason I can find for this trend is "The increase in the trade deficit in recent years has been due largely to sluggish demand for U.S. exports and rising demand for imports caused primarily by capital inflows into the U.S. market, slow economic recoveries in other countries, and faster economic growth in the United States" (Nanto & Lum, 2006). Let's first examine the true meaning of the merchandise trade deficit. The merchandise trade deficit is "the difference between exports and imports of goods" (Sawyer & Sprinkle, 2007, p. 267). It has been predicted that in 2007, the deficit will rise to $888 billion, but then decline somewhat in 2008 (Nanto & Lum, 2006).

The current account deficit is a major problem because this may cause a devaluation of the United States dollar (Nanto & Lum, 2006). If this happens "U.S. interest rates would have to rise to attract more foreign......

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Title: Us Trade Deficit
Approximate Word Count: 744
Approximate Pages: 3 (250 words per double-spaced page)

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