ABC analysis of USA’s trade deficits
Supply Chain Professionals are working in a chaotic phase of global readjustment triggered by USA’s point of view anchored around trade deficits.
For decades, Businesses in general& Supply Chains in particular have relied on ABC analysis to find priority for financial control. This short article is to decipher based on a Supply Chain this practice used.
International Trade Centre data of USA trade deficits shows that
- USA has trade surplus with 118 countries
- USA has trade deficit with 99 countries.
Of the 118 countries only 6 of the countries make up for 70% contribution to net trade deficit,
- China contributes 26
- Mexico contributes 14%
- Vietnam contributes 9%
- Germany contributes 7%
- Canada contributes 7%
- Japan contributes 7%
Of the total 97 HS codes only 4 contribute to 70% of the total net trade deficit
- Code ’85 (Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television ...) contributes 23%
- Code ’87 (Vehicles other than railway or tramway rolling stock, and parts and accessories thereof) contributes 20%
- Code ’84 (Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof) contributes 20%
- Code ’30 (Pharmaceutical products) contributes 7%
- China contributes to the largest imports of Code ’85.
A simple approach of ABC which Supply Chain professionals & Business in general have used over many decades is what I have used above to bring some clarity.
Data source: International Trade Centre
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