Business & Trade



The U.S. has the largest and most technologically powerful economy in the world, with a per capita GDP of $40,100. In this market-oriented economy, private individuals and businesses make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace.

U.S. firms enjoy considerably greater flexibility than their counterparts in Western Europe and Japan in their capital investment decisions as well as in laying off surplus workers and developing new products. At the same time, they face higher barriers to entry in their rivals' home markets than the barriers to entry of foreign firms in U.S. markets.

U.S. firms are at or near the technological forefront, especially in the fields of information technology, medicine, aerospace and military equipment, although their advantage has narrowed since the 1970s. The onrush of technology largely explains the gradual development of a "two-tier labor market" in which those at the bottom lack the education and the professional or technical skills of those at the top and thus fail, more and more, to get comparable pay raises, health insurance coverage and other benefits. Since 1975, practically all the gains in household income have gone to the top 20% of households.

The response to the terrorist attacks of Sept. 11, 2001 showed the remarkable resilience of the U.S. economy. The war in Iraq has required major shifts in national resources to the military. The rise in GDP in 2004 was undergirded by substantial gains in labor productivity. The economy suffered from a sharp increase in energy prices in the second half of 2004. Long-term problems include inadequate investment in infrastructure, rapidly rising medical and pension costs for an aging population, sizable trade and budget deficits, and stagnation of family income in the lower income groups.

This page provides documentation on U.S. trade and economic policies with links to practical information about the business and economic environment in the United States.

- Abridged from State Dept. Publications and other U.S. government materials
Online Documents
NGO Websites

[Last Updated: 9/13/2010]
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