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question regarding trade deficit of the US


yadayada
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Since a lot of that deficit is with China, does it count towards the deficit if an american invests in a factory in China to send goods to the US? Technically americans make money on that, but is it fully counted as imports towards the US? Even though the money ends up in american pockets?

 

So basicly when is something technically an export or import?

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If I am understanding your question correctly, you want to know if a Us owned company imports something from a Us owned factory in China (or any other country for that matter) if it counts as part of the trade deficit?  The answer is yes, even though it is US owned it is still imported and therefore counts as part of the trade deficit.

 

Definition of 'Current Account Deficit'

 

A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services it exports. The current account also includes net income, such as interest and dividends, as well as transfers, such as foreign aid, though these components tend to make up a smaller percentage of the current account than exports and imports. The current account is a calculation of a country’s foreign transactions, and along with the capital account is a component of a country’s balance of payment.

 

 

http://www.investopedia.com/terms/c/currentaccountdeficit.asp

 

Hope this helps...

 

 

cheers

Zorro

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