The Importance of International Trade To The United States

International trade has always been very important to the United States in regards to their economic health. The United States has gotten a lot of imports, mostly from the countries of china and Japan, which supplements the United States’ economy. The United States has imported more goods from other countries more then they exported goods to. The United States recent data regarding imports and exports is that exports made nine percent of the United States’ GDP and 15 percent of GDP is made up of imports. In comparison to other countries, The United States is the leading exporter of products around the world with eleven percent of world exports being taken up by the United States. However, the exports and imports as a percentage of U.S. GDP is low in comparison to Belgium, Korea, Great Britain, and Germany in which these countries have a higher percentage of imports and exports for GDP than the U.S. does.

Comparative Advantage

The basic meaning of comparative advantage is that one entity could produce more of a good or service at a lower opportunity cost in comparison of two goods being produced between two entities. The concept of comparative advantage is a very important concept in making economical decisions because comparative advantage sees what products can two entities produce more of one product efficiently and it helps to set up terms of trade between the two entities. Without trade, there would be no gain in production that would result through the action of trading between two entities. One example that comparative advantage that would come into play is that for instance, the United States can produce ten Playstation 3’s and twenty-five Microsoft Xboxes and Japan could only produce twenty Playstation 3’s and ten Micr...

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...iscussion that centered on the Buy American provision of a 2009 stimulus reports that “FedEx CEO Fred Smith argued the plan, which in part would require companies to buy iron and steel manufactured the U.S., would ultimately hurt global trade.”(2009). The Similarity of the buy American discussion and the Smoot-Hawley act is marked with the purpose of saving domestic jobs inside the United States. The result of this policy would be costly to consumer and not beneficial to the United States because the United States is a global power in the international trade market.

References

Bruce, Mary, (2009), “'Buy American' Provision Draws Fire”. Retrieved from: http://abcnews.go.com/ThisWeek/CEOProfiles/story?id=6780785&page=1

Kelley, Martin, (2011), “What Is the Smoot-Hawley Act?”, Retrieved from: http://americanhistory.about.com/od/greatdepression/f/smoot_hawley.htm