Biggest Trading Partners - United States

It's fairly balanced now. The rise of fracking and the lower cost of oil has reduced imports from Mexico, Canada, and Saudi Arabia. Venezuela and Russia have fallen off the list entirely since 2012.

Why? Israel has a tiny population.

Israel makes the list now!

And now it's gone again.

This quiz shows you just how unbalanced America's trade relationship is with most countries. Its a trend that will have to be corrected at some point. But I'm not implying malice. I think the most likely explanation for the gap is that it's relatively easy and incredibly lucrative to market products in the United States. There is no other market that is so big and few that are so open to competition.

Also the fact that the dollar is so strong relative to other currencies. It is a similar situation (now not so much with Brexit) in the UK. The Pound was worth way more than the it should be, so imports are cheap and exports are less competitive. It's also the reason why Germany is able to have such a massive export market compared to other countries in the Euro like Greece. Their currency is effectively devalued as they share it with weak economies with Greece, Italy and Spain.

In theory having a trade deficit can last forever, as long as you can keep on paying for it, through reducing your savings or selling your assets abroad. However this is not really sustainable. So eventually the dollar will fall in value, allowing American exports to be more competitive.

However that's not to say that having a strong currency isn't beneficial to the United States. Another of the reasons it is so strong is that the dollar is used so widely throughout the world. It is the main reserve currency for basically every country and most commodities are bought with it. This makes it easier for American's to trade with other countries. A company in Madagascar, for example, will find it very difficult to trade with another country with their currency. Nobody wants their money (I don't even know what it's called...) so the cost of currency transactions will be considerably higher. For American's literally anyone will accept their currency so the cost of trade is basically nothing.

Or maybe, USA got rich allowing it to import more than it exports?

Well quite clearly the U.S. has. Its gdp per capita has grown from 36,000 in 1990 (in today's prices) to about 52,000 today. Take your point that U.S. buys more than it sells. Obviously this isn't going to last for ever. But that isn't how you get rich. The whole global economy sells the exact same amount that it sells, unless there's a secret interplanetary economy I'm not aware of. Yet the global GDP has grown massively almost every year since the industrial revolution.

If you're a company in America who decides to move their factory from Ohio to China, you will create a trade deficit to the U.S., assuming you only sell to Americans. However you still own the goods being made in China, you still own the factory and all the primary goods needed to make your product. Except because your costs have fallen (the reason why you moved production to China) your profits have now increased. Profit is income, so you're now richer.

Basically you getting confused with mercantilism and capitalism. Mercantilism is the economic theory that was most common in colonial Europe. That in order to generate wealth you have to have a positive balance of trade. Why? Because there is a finite amount of wealth and capital in the world which remains the same every year. If you want to have a greater share of the global wealth you have to transfer it to your country through higher exports than imports. The US, among most of the world now follows capitalism. Where if you invest your disposable income then you can increase the amount of capital available. With more capital, you can make more stuff and therefore get richer, crucially without making anyone poorer. Trade deficits are now no longer the determinate of deciding which countries are most powerful, or rather least powerful.

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