Exports refer to those products and services that are made or provided by American companies, sold directly to consumers in other countries or to those other countries themselves. They are things made or produced in the United States, or in any home country, that are then sent to other countries for consumption in that second country. Gross domestic product, on the other hand, is everything that is produced in a given country, whether it is for export or for consumption by people within the country. For instance, in the United States, the gross domestic product means every single thing produced by a company within the country. It also means the total value of services rendered within the country. This is a difficult thing to figure, and while GDP is generally accepted as a measure of economic prominence, there is some understanding that GDP is not meant to be an exact measure of production. It is in some ways an approximation.
Some would argue that American exports have increased because the value of the dollar has been weak to some extent (Viner, 2016). For example, American companies are shipping more cars abroad rather than having more cars imported. This is also a signal of the strength of American industry. As American companies grow stronger, they are able to make more. The US trades from a position of manufacturing strength and currency weakness. Its companies are able to produce goods that people in other countries want, and those goods can be had for relatively cheaply because of the weakness of American currency (Auboin and Ruta, 2013). This is changing in 2017, but in the last few years, the weakness or sluggishness of the American economy has left the dollar weaker, making the US a more attractive trade partner for those countries that need imports.
In the book of Ecclesiastes, God suggests that profits can be made in foreign trade. When countries invest their money in foreign trade, they can see long-term returns. This suggests that having a positive trade balance is a good thing.
- Auboin, M., & Ruta, M. (2013). The relationship between exchange rates and international trade: a literature review. World Trade Review, 12(3), 577-605.
- Viner, J. (2016). Studies in the theory of international trade. Routledge.