Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/231219
Authors: 
Xing, Yuqing
Detert, Neal
Year of Publication: 
2011
Citation: 
[Journal:] Aussenwirtschaft [ISSN:] 0004-8216 [Volume:] 66 [Year:] 2011 [Issue:] 3 [Pages:] 339-350
Abstract: 
In this paper, we use the iPhone as a case to show that even high-tech products invented by the United States (US) companies will not increase US exports, but on the contrary exacerbate the US trade deficit.The iPhone contributed US$1.9 billion to the US trade deficit with the People's Republic of China (PRC).Unprecedented globalization,well organized global production networks, the development of cross-country production fragmentation, and low transportation costs all contributed to rational firms such asApple making business decisions that contributed directly to the US trade deficit.Global production networks and highly specialized production processes apparently reverse trade patterns countries such as the PRC export high-tech goods like the iPhone while industrialized countries such as the US import the high-tech goods they invented themselves. In addition, conventional trade statistics greatly inflate bilateral trade deficits between a country used as export-platform by multinational firms, and its destination countries.
Subjects: 
China
US Trade deficit
iPhone
JEL: 
F1
Document Type: 
Article

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