United States Trade Relationship with Canada and China
Topic: Write a proposal of at least 600 words (excluding references), consisting of two tasks:
1. Select a country and provide a brief overview of its recent international trade with two of its trade partners, including data and graphs.
2. Suggest a theoretical grounding for the observed trade patterns using the theories developed in the course (Gravity, Ricardian, H-O, Standard Trade Model or New Trade Theory), and explain your model choice.
This topic provides ample scope for using data. Descriptive statistics, graphs and tables, will be sufficient. You are not required to do econometric analysis.
You are required to use a good mix of sources including the internet, textbooks, newspapers, and academic journals, articles from newspapers and business magazines. You must provide a list of full-ranged references used or referred to in the essay.
The teacher explained: First choose a country and find two of its trading partners. Then a model for each country was analyzed
老师解释说：首先选择一个国家，找出两个该国家的贸易伙伴。然后每个国家对应一个模型进行分析
United States Trade Relationship with Canada and China
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United States Trade Relationship with Canada and China
The United States (US) is the largest trading country in the world and has established trade relations with most countries (Office of the United States Trade Representative, n.d.). Two of its top trade partners are Canada and China, which will be the focus of this paper.
US Trade with Canada
The US and Canada share the most extensive border globally, and every day, approximately $2.6 billion in goods and services get traded across the two countries (US Department of State, 2022). In addition, the two countries share a trade agreement- The United States-Mexico-Canada Agreement (USMCA)- with Mexico to facilitate free trade in the region. The US has a negative trade deficit with Canada, which has been rising in the last five years, as shown in figure 1. Trade between the US and Canada supports millions of jobs and facilitates a secure flow of people and goods across the US-Canada border, which is critical for the economic prosperity and competitiveness of both countries (Government of Canada, 2022)
Figure 1: US-Canada trade in Goods
Year
Exports
Imports
Balance
2022
206,022.1
260,676.1
-54, 654.0
2021
307,758.1
357,787.5
-50,029.4
2020
256,212.3
270,024.9
-13,812.6
2019
292,820.3
318,588.8
-25, 768.5
2018
299,731.7
318,574.8
-18,843.1
Data Source: (US Census Bureau, 2022a)
US Trade with China
The US and China have an uneasy trade relationship characterized by trade wars and trade deals that continue to be a topic of contention (Ivanovitch, 2020). Despite this, China continues to be US’s top trade partner, with the trade between the countries expanding by 11.7% in 2022 CITATION Xij22 \l 1033 (Xijia, 2022). Although the US has been trying to lessen imports from China through increased tariffs and trade restrictions, imports from China are still high, contributing to a high trade deficit, as shown in figure 2. Despite the turmoil, the US-China trade relationship benefits both countries because it has lowered commodity prices for US consumers and generated income for the Chinese (Curran, 2020).
Figure 2: US-China Trade in Goods
Year
Exports
Imports
Balance
2022
83,912.9
318,406.4
-234,493.5
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