The United States in
a New Global Economy?
International trade has become an integral part of the U.S. economy over the past few decades. The United States imports electronics from China, apparel from Mexico, oil from Saudi Arabia, and steel from Korea, and exports aircraft from Washington, wheat from Kansas, software from California, and machinery from Illinois. The United States sells financial and information-technology services to customers around the world and buys data entry, software programming, and call center services from India. There is hardly a sector of the economy or a region of the country that is unaffected by international markets. As the twenty-first century begins, the United States may even have achieved a historically unprecedented degree of economic integration with the rest of the world. Perhaps it is not surprising, therefore, that the rapid growth of trade has been accompanied by an intensified debate over U.S. trade policy. To establish a context in which we can later examine current trade policy, this chapter briefly looks at the role of trade in the U.S. economy.
How important is trade in merchandise goods to the U.S. economy? The simplest way to answer this question is to look at its share in gross domestic product (GDP). In 2008, for example, merchandise exports amounted to roughly $1,291 billion, about 9.1 percent of GDP. At the same time, merchandise imports were almost $2,112 billion, about 14.8 percent of GDP.1
1 Council of Economic Advisers, Economic Indicators, March 2009.