The United States has a big trade deficit: the difference between imports and exports is a staggering 500 bn. dollars per year.
That’s a big number. But is it a problem?
Recall the fall of 2016: In the eyes of the newly elected US President Donald Trump, the trade deficit is a big problem.
In this minicase, picture yourself as Trump’s advisor. Look at different economic factors. Which one has been the key driver of the US trade deficit: Trade agreements, specific countries or the exchange rate? Surely, this will help him make the right decisions!
Try the minicase and share your answer in the comments! And when you’re done, get the second part of the case.