(1) US Current Account Deficit and the impact of Trump’s Trade Policy on US Current Account Deficit and FDI Activities in the U.S. and other Countries

The global current account deficit of the United States is huge. Plot the history of Balance of Payments (BOP) data of US since 1950. Show the top five countries/regions that US has the greatest current account deficit with. Is the situation sustainable in international financial and domestic political (i.e., trade policy) terms? Discuss possible consequences of lasting US current account deficit. Why is it a priority to correct BOP for US foreign economic policy? How has government budget deficit contributed to current account deficit? What remedy could US consider to correct current account deficit? What are pros and cons of devaluation of domestic currency to correct trade deficit? What trade policies have the Trump administration adopted and what is the (potential) impact of these policies on US current account deficit, manufacturing jobs, and FDI activities in the US and other related countries? Give three specific examples of multinational corporations/industries on how they take advantage of opportunities or reduce risks under the new policy.

Sample Solution

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