U.S. Trade Deficit

The United States’ current account trade deficit decreased 12.1 percent in the 2nd quarter, lowered by an increase in American exports and cheaper oil imports. The Commerce Department said that the current account deficit totaled $117.4 billion in the second quarter. That compares with a revised deficit of $133.6 billion in the first quarter. The current account tracks the sale of merchandise and services between nations and their investment flows. This account is watched as the current account as a sign of how much the United States needs to borrow from foreigners. It's predicted to widen in the coming quarter and a global slowdown has damped demand for American exports. With oil prices rising again from the increased tension in the Middle East. The European debt crisis has put much of the region into recession. The European accounts for 1/5 of American exports. Since the growth has slowed in other major export marketsEurope accounts for about one-fifth of American export sales.  The current deficit hit a record high in 2006 at $800.6 billion. It shrank after a recession reduced American demand for foreign goods by a greater amount than American export sales were lowered.  The gap widened again in June of 2009 when the recession ended. In the second quarter the deficit shrank to $158.8 billion. While American exports rose 1.4 percent.  Imports fell half of a percent, reflecting the drop in petroleum imports. The American surplus in services increased 1.3 percent to $46.5 billion. The gain was a result of stronger American overseas sales of financial, business and professional services and higher royalties to American companies.The surplus in investment income increased 0.8 percent to $184.6 billion in the second quarter, reflecting higher interest and dividend payments earned by American investors on their overseas holdings.

Summary of the New York Times Article: "U.S. Trade Deficit Falls 12%, Aided by Cheaper Oil Imports" September 18, 2012

After reading this article I wondered why the United States hasn't lowered it's import of Petroleum before. Since the effects shown in this article is that  the decrease in petroleum imports has led to a decrease in the trade deficit.  Many Americans say that we can run on our own petroleum but I wanted to ask everyone what their opinions are if we were to stop importing petroleum from foreign countries, and the effects that would have on our trade relationships in the Middle East.  I would also ask others to comment on what they believe would be the best way to lower the deficit.

My personal beliefs on this situation is that completely stopping the import of foreign oil would be detrimental to establishing better trade relationships with Middle Eastern countries. Establishing a better trade relationship could have positive effects on political relationships as well. I also believe we won't have enough oil without imports These are just a few of the things I believe.