U.S. Intra-Firm International Trade

Intra-firm trade is an important component of United States’ international trade with the rest of the world. The stylized facts about U.S. intra-firm trade reveal some interesting patterns. Intra-firm trade is increasing with newly developed countries particularly in Asia and Eastern Europe, there is an intra-firm trade deficit that adds to the overall trade deficit and intra-firm trade with China is a large and growing part of overall intra-firm trade. These facts are consistent with a horizontal multinational trade model. The high share of intra-firm transactions in international trade has implications for the trade deficit and tax polic