Your L/S Activity relates to chapter 19 (International Trade) You will be answering questions related to the purpose of Microeconomics and the applications of concepts for economic measurements. Research and Answer the following questions: – What are the major U.S. exports and imports? How does international trade affect U.S. consumption possibilities? (3 pts) – What determines which goods a country should produce and export? (3 pts)

QUESTION

Your L/S Activity relates to chapter 19 (International Trade) You will be answering questions related to the purpose of Microeconomics and the applications of concepts for economic measurements.

Research and Answer the following questions:

– What are the major U.S. exports and imports? How does international trade affect U.S. consumption possibilities? (3 pts)

– What determines which goods a country should produce and export? (3 pts)

– What is the World Trade Organization (WTO) and how does it help foster multilateral trade? (Check the WTO website at http://www.wto.org/.) (4 pts)

– Firms hurt by cheap imports typically argue that restricting trade will save U.S. jobs. What’s wrong with this argument? Are there ever any reasons to support such trade restrictions? (5 pts)

Use APA style and minimun 200 words for each question. I will add the references at the end just do the questions. Thanks.

ANSWER

International Trade and its Impact on the United States Economy

Introduction

International trade plays a crucial role in shaping the economic landscape of a country. This essay explores the major U.S. exports and imports and examines how international trade affects U.S. consumption possibilities. Additionally, it analyzes the factors that determine which goods a country should produce and export. Furthermore, the essay delves into the role of the World Trade Organization (WTO) in fostering multilateral trade. Lastly, it evaluates the argument that restricting trade can save U.S. jobs and discusses whether there are any valid reasons to support such trade restrictions.

Major U.S. Exports and Imports

The United States is a prominent player in the global market, both as an exporter and an importer. Major U.S. exports include capital goods, such as aircraft, machinery, and medical equipment, which contribute significantly to the country’s trade surplus. Additionally, the U.S. is a leading exporter of services, particularly in sectors like finance, insurance, and technology. On the other hand, the United States imports a wide range of goods, including consumer electronics, vehicles, apparel, and petroleum products (Segal, 2022). The country’s largest trading partners are China, Canada, Mexico, Japan, and Germany.

International trade expands U.S. consumption possibilities by providing access to a wider variety of goods and services at competitive prices. Imports allow consumers to access products that may not be produced domestically or are available at higher costs. This variety and affordability of imported goods enhance consumers’ standard of living and offer greater choices. Furthermore, international trade fosters specialization, enabling domestic industries to focus on producing goods in which they have a comparative advantage. This specialization enhances productivity and efficiency, leading to higher overall economic output.

Determinants of Goods Production and Export

Several factors determine which goods a country should produce and export. Comparative advantage, based on differences in resource endowments and production efficiencies, plays a crucial role. Countries tend to specialize in producing goods and services in which they possess a comparative advantage, as this allows for more efficient resource allocation and higher productivity. Additionally, market demand, technological capabilities, infrastructure, and factor endowments, such as natural resources and skilled labor, influence the goods a country chooses to produce and export. Government policies, including trade agreements and incentives, also shape production decisions.

The World Trade Organization (WTO)

The World Trade Organization (WTO) is an international organization that aims to promote and regulate global trade. It provides a framework for negotiating and enforcing trade agreements among its member countries. The WTO’s primary objectives include reducing trade barriers, facilitating the smooth flow of goods and services across borders, and resolving trade disputes. It encourages member nations to adopt fair and transparent trade policies and promotes non-discrimination in trade practices. The WTO also helps developing countries integrate into the global trading system by offering technical assistance and capacity-building programs.

Argument against Restricting Trade

Firms that are negatively affected by cheap imports often argue that restricting trade would save U.S. jobs. However, this argument overlooks several important factors. First, trade restrictions tend to lead to retaliatory measures from trading partners, potentially harming other sectors of the economy that rely on exports. Second, restricting trade can raise prices for consumers, reducing their purchasing power and potentially leading to job losses in industries that depend on domestic demand (Radcliffe, 2023). Third, protecting inefficient industries through trade restrictions hampers overall economic efficiency and hinders the development of competitive industries.

While there may be instances where temporary trade restrictions are warranted to address unfair trade practices or protect national security, such measures should be targeted and time-limited. It is crucial to address the underlying issues through structural reforms, investment in education and training, and supporting industries to enhance competitiveness. Emphasizing innovation, research and development, and promoting fair competition can help industries adapt and thrive in a globalized economy.

Conclusion

International trade plays a pivotal role in the U.S. economy, with major exports and imports spanning a wide range of goods and services. It expands consumption possibilities by providing access to a diverse array of products at competitive prices. Comparative advantage, market demand, technological capabilities, and government policies shape the goods a country produces and exports. The World Trade Organization fosters multilateral trade by providing a platform for negotiating and enforcing trade agreements. Arguments advocating trade restrictions to save U.S. jobs overlook the broader economic implications and potential drawbacks. However, targeted measures may be necessary to address specific issues while promoting long-term competitiveness through structural reforms and investment.

References

Radcliffe, B. (2023). The Basics of Tariffs and Trade Barriers. Investopedia. https://www.investopedia.com/articles/economics/08/tariff-trade-barrier-basics.asp 

Segal, T. (2022). What Are Exports? Definition, Benefits, and Examples. Investopedia. https://www.investopedia.com/terms/e/export.asp 

World Trade Organization. (n.d.). Retrieved from http://www.wto.org/