The Organization for Economic Cooperation and Development and the World Trade Organization have created a new possibly more accurate system for analyzing trade between countries. The traditional method measures only imports and exports and is much simpler. However, the old model is considered; by many experts as too simple for an increasingly complex worldwide economy. The new systems looks into each step taken in the production of goods; from raw materials to finished product. Under the new system, the trade deficit between China and the United states falls about 25 percent from 176 billion to 131 billion. If this system becomes the new norm than the United States econmiy will become less dependent on Chinese currency.
The trade deficit between other countries like Germany and Korea would increase under the new system, but these countries are further allied with the United States. In the end the United States trade deficit in the global economy does not change but under this new system both organizations feel they can better understand the effects of tariffs.