Trade data in the US333 SAM (12 minute read)


Learning Objective:
At the end of this lesson, you will know how to locate and interpret data in the SAM on trade, import tariffs and export taxes.  You will be able to calculate tariff and tax rates and the balance of trade.

Trade Data in the SAM

Trade is a part of the flow of economic activity in an economy. Countries buy imports from foreign markets, and they export goods and services to the rest of the world. Data in the SAM describe these exchanges between a country and the rest of the world. 

In the SAM, a country's exports and imports are reported in the Rest-of-World (ROW) column and row accounts. Figure 1 presents portions of the US333 SAM, in which extraneous columns are torn out so we can focus on the trade data. The ROW column and row accounts (shaded in orange) report the values of trade flows. The cells in the intersection of the commodity column accounts and the IMPTAX and EXPTAX row accounts (shaded in orange) are the import tariff and export tax payments, respectively, on each traded good and services. 

Figure 1.  Trade data in the US 333 SAM 

Trade data in the SAM

A large type version is available HERE.

Along the ROW row account, the value of imports is reported for each commodity. For example, the US imports $33 billion worth of agricultural commodities and $1,878 billion worth of manufactured goods. The imports are reported in their "CIF" values. CIF stands for cost - insurance - freight. Importers are assumed to pay for insurance and freight charges. The CIF cost is therefore the total cost of the goods once they reach the importing country's port or border, inclusive of these trade costs.

Exports of each commodity are reported down the ROW column account.  For example, the US exports $52 billion worth of agricultural goods and $970 billion worth of manufactured products. Exports are valued in their "FOB" values.  FOB stands for free on board, so it is inclusive of the producer's sale price and any export taxes that had to be paid.  It excludes freight and insurance costs, because these are paid by importers.  

Reporting imports along the row account and exports down the column account makes sense if you think about it from the perspective of the rest of the world. Recall that rows in a SAM report income and columns report expenditure. US imports are a source of income to the rest-of-world, and US exports are an expenditure for them.  

Import Tariffs and Export Taxes - Revenues versus Rates

In most countries, consumers have to pay tariffs on imports. The value of tariff revenue from each commodity is reported in the commodity column and the import tax row (IMPTAX).  US consumers pay US import tariffs of $1 billion on agricultural imports and $23 billion on manufactured imports. 

The tariff rate for a commodity is calculated from the data in the SAM as:

value of import tariff revenue / CIF value of the import * 100

For example, the tariff rate on US manufacturing imports is calculated as:

 $23 / $1,878 * 100 = 1.22

Producers may face export taxes on their sales to foreign markets. The value of export tax revenue from each commodity is reported in the commodity column and the export tax row (EXPTAX).  Because the FOB values of the exports in the ROW column already include the tax, the export tax rate is calculated differently than an import tariff rate. The tax payment must first be removed from the FOB value. The export tax rate for a commodity is calculated as: 

        value of an export tax / (FOB value of exports minus the value of the export tax) * 100

In the case of U.S. manufactures, the export tax rate is calculated as:

                                             $3 / ($970 - $3) * 100 = 0.3

Balance of Trade / Capital Account Balance

A country's balance of trade is the difference between the revenue it receives for its exports, and the cost of its imports. The balance of trade is calculated as:

(Total FOB value of exports) minus (Total CIF value of imports)

In the US333 SAM, the balance of trade is reported in the cell at the intersection of the ROW column and the Savings-Investment row.  It appears in the S-I account because the balance of trade is the flip side of the capital account balance, in which countries experience foreign capital inflows or outflows that finance their balance of trade.

Trade deficits must be financed by foreign capital inflows, and trade surpluses occur when countries' capital flows toward foreign investment opportunities.  A trade deficit appears in the SAM as a positive number because it is a capital inflow that adds to the country's income and spending power.  A trade surplus appears as a negative number because it is an outflow of capital to foreign countries. 

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Last modified: Saturday, 27 April 2024, 7:44 PM