Another US Tech Trade Deficit

eldavojohn writes "The United States is suffering again from a massive trade deficit — $38.3 billion in 2006. And it's been going on since 2002. From the press release: 'In 2006, Asia supplied 60 percent of all US imports of advanced technology products. Europe supplied more than 20 percent, and North America more than 15 percent.'"

Comments

Re:No such thing as a Trade Deficit

[TubeSteak]

By definition of trade, something is given away and something is received in exchange. There is no deficit whatsoever that occurs from any single instance of trade, even if that trade involves promises to repay at a future time.
...
Talk of "trade deficits" is political manipulation designed to bamboozle the uninformed. Anyone who believes "deficits" result from trade is as gullible as the Emperor's New Clothes. Do you even understand what's being discussed here? TFA is saying that in the electronics sector, we are buying more than we are selling. It has nothing to do with 1-to-1 business transactions.

My country buys 10 billion [currency] worth of widgets from your country
Your country buys 5 billion [currency] worth of widgets from mine
My country has a trade deficit of 5 billion [currency] in the widget sector.

It's imports vs exports.
When imports do not = exports, you have an imbalance.

For your nonsensical post to be correct, we would have to be buying and selling widgets in equal quantities. Hint: we aren't.

I really can't understand how anyone moderated you up.
This stuff isn't that hard.

Re:How long

[joggle]

Is this $20 billion included in the $80 billion trade deficit? That is, would it be $100 billion without Microsoft?

Yes, this is included in the trade deficit calculation so yes, if your numbers were correct then the deficit would be $100 billion without Microsoft. Washington state is one of the very few states with an international trade surplus in large part due to Microsoft and Boeing. Other companies with a trade surplus are restaurant chains that sell franchises overseas (such as Starbucks, McDonalds, and KFC).

On the other hand, is perhaps this money not arriving to the US, but rather received only by "Microsoft Japan"

The money is funneled through Microsoft Japan. Microsoft in Redmond still gets a slice of every license sold there (or at least for the great majority of licenses). In the case of restaurant chains usually the franchises are locally owned and operated so the American company only profits from the initial franchise sale and (sometimes) from the ingredients sold.

Re:What are you talking about?

[RexRhino]

Okay, so our dollars can be spent on other country's goods, too. No, I didn't say that, you just made that up completly off the top of your head. U.S. dollars are the official currency of the U.S., and are only good for trading for U.S. goods (or trading the currency with other people who want to purchase U.S. goods).

Now we can't buy foreign goods with our dollars? But didn't you just say we are sending them our dollars? We purchase their goods with U.S. dollars, which goes into an account at a U.S. bank, which they can then spend on U.S. goods... or trade that currency for other currencies in countries where they want to purchase something.

But they can't use that U.S. currency to purchase things in France, or to purchase things in the UK, or to purchase things in Japan, unless they find a bank that will be willing to trade them a corresponding amount of those currencies... and to do that, there have to be people in France, or the UK, or Japan, who want to buy U.S. goods and so are willing to trade their own currency for U.S. dollars.

There is no gold standard... The dollar isn't backed by any commodity. The only value that the U.S. dollar has is that it can be used to purchase U.S. goods. For every dollar the U.S. spends on foreign goods, those foreign traders need to spend a dollar on U.S. goods (or on U.S. stocks or bonds or property).

I don't think you have any idea how international trade actually works. This from someone who thinks the U.S. is still on the gold standard and wants to emulate the trade policies of Cuba.