Debunking Myths About Imports
May 23, 2014
Americans generally think that exports are good and imports are bad. However, Laura Baughman, president of the Trade Partnership, explains that imports are a good thing and pose no threat to the U.S. economy.
Baughman discusses some of the common myths surrounding imports and exports:
- Myth: Imports come from low-wage countries like China. While China is the largest supplier of U.S. imports, half of America's non-oil imports come from other developed countries with high wages. Nine of the top 20 of these suppliers are high-wage trading partners, including Canada, Japan, Germany, the U.K., France, Italy, Ireland and Switzerland.
- Myth: Imports cost jobs. While businesses shut down when they cannot compete with low-cost imports, other businesses hire workers -- such as transportation or warehouse workers -- because of imports. Low-cost imports also boost productivity, because they create economic efficiency which further stimulates job creation.
- Myth: Imports hurt U.S. manufacturing. In fact, more than 60 percent of imports are raw materials or components that are used to make goods and grow crops in the United States.
- Myth: Floods of imports are hurting the U.S. economy. This is not so -- when imports grow, the economy grows, and when the economy slows, imports slow down as well. A growing economy spurs consumers to buy more, while a poor economy results in less spending on both imports and U.S.-made goods.
- Myth: The U.S. economy welcomes imports. While the average U.S. tariff is low, at 1.4 percent, more than 1,000 product categories are subject to tariffs of 10 percent or more. Moreover, the U.S. imposes quotas on products such as sugar, diary, ethanol, cotton and beef. These barriers only raise the prices of goods in the U.S., hurting low and middle-income Americans.
Trade officials should do more to promote imports, says Baughman.
Source: Laura Baughman, "Five Myths About Imports," Wall Street Journal, May 19, 2014.
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