International Trade in the United States

News Related to International Trade in the United States

Business outline for the United States

Main Industry Sectors

The American agricultural sector is without a doubt, the biggest in the world. It is characterized by high productivity and by the use of modern technologies. The United States is one of the major producers of corn, soya, beef and cotton.  California alone produces more than 12% of the country's total agricultural production.  Nevertheless, agriculture only accounts for 1% of the American GNP.

The United States is a very industrialized country. The industrial sector contributes almost a quarter of the GDP and includes a large variety of activities. The most significant are the manufacturing of electric and electronic machinery, chemical products, industrial machinery, the food industry and automobile sectors. It is also the world leader in aerospace and pharmaceutical industries. The abandunce of natural resouces has turned the United States into a leader in the production of several minerals and allows it to maintain a diversified production. It  is thus the biggest world producer of liquid natural gas, aluminum, electricity and nuclear energy. It is the third oil producer in the world.

The American economy is essentially based on services. The tertiary sector accounts for more than three-fourths of the GDP and of the workforce.

Economic Overview

The United States is the largest and most powerful economy in the world. Nevertheless, it was the first to suffer from the consequences of the financial crisis. The country experienced the words recession since the crisis of the 1930s, the economy shrinking by 2.6% in 2009. Thanks to the government's large-scale budget and monetary stimulus plan, which among others stimulated household consumption, the economy has recovered in 2010, with a growth of 2.6%. The economy is expected to continue to grow slowly in 2011.

In the recent years and following the raise in expenditure in the defense field, the financial crisis and the limited budgetary solutions offered by the government, the federal finances are in deficit. The government has therefore set itself the goal of lowering the deficit by more than 10% in 2010, to 3% in 2015. After having built their growth based on internal consumption for a long time, the American administration has recently indicated its willingness to switch to a model where growth would be coming from exports. The aim is to double exports in five years. Finally, a new stimulus plan has been announced, planning to renew and develop transport infrastructure, as well as introduce tax deductions for businesses.

Following the crisis, the unemployment benefits shows a strong upward trend, exceeding 9% at the beginning of 2010 and thus reaching the highest numbers in the last 25 years. In addition, since the 1980s we see a growth in social inequality.

FDI in Figures

FDI dropped in 2009 because of the financial crisis which weakened the global economy. There should be a mild recovery following the beginning of the recovery in 2010. The United States remains the world's number one destination for foreign investment. In fact, the country continues to offer a predictable and transparent juridical system, developed infrastructures and an access to the world's most lucrative consumer market. Consequently, it remains the world's primary economic power, holds the first place in international finance and is the third most populated country in the world.

FDI Government Measures

The American policies on taxation and regulations provide foreign investors with a lot of management freedom.  However, in the present security environment, foreign-government controlled investments are sometimes considered as a source of concern, more and more so since the tragic September 11^th events.

The American Ministry of External trade provides a Invest in America: Guide to Federal Incentives and Programs Available to Investors, which gives information, programs and appropriate federal agencies.

Country Strong Points

The American market has several advantages. With a population of more than 300 million people and the world's strongest economy, the United States represents the most important market in the world, irrespective of the sector. The American manpower is considered to have a high level of qualification and to be one of the most productive and most innovative in the world. The United States has developed strong regional "clusters", which are a collection of companies in the same activity sector in a zone. These centers are very attractive to foreign investors.

Country Weak Points

The country's weak points are a very competitive economy and a financial system that has been seriously affected by the financial crisis. The American economy is in grave difficulty. The subprime lending crisis has ended some major investment projects.

Foreign Trade Overview

The country has generally reduced trade barriers and integrated into the world economic system. The United States is convinced that trade promotes economic growth, social stability, and democracy in individual countries, and also helps to promotes better international relations. Nevertheless, trade represents less than a third of the country's GDP. As part of the 2010 economic stimulus plan, the administration has adopted a policy of promoting exports, with the aim of doubling exports in the next five years.

The U.S. trade balance is structurally strongly negative. As an effect of the economic crisis, the decrease in imports reduced the deficit, nevertheless with the economic recovery it has progressively deepened and this tendency should continue.

The main trade partners of the United States are the countries of NAFTA (North American Free Trade Agreement composed of the United States, Mexico and Canada), China and the European Union.