Why are so many goods and services imported in the United States despite its richness and production level.

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A country engages itself in international trade for various reasons. One of the major reasons is to create international trade relationship with other nations. A country would also import goods and services that are not found within the country’s boundaries. There are many economic reasons why the United States imports too may goods and services despite its attributes of being rich and productive. The United States is the richest country in the world and the largest importer of goods and services. This means that its consumption capacity is more than what the country can produce or the country has fewer natural resources than its industries would require as inputs.

The United States imports goods and services that hardly exist in the United States economy. A certain mineral or a natural resource may be too critical to the US production but hardly found within the country (Piana, 2001). In this case, the US would strike a trade deal with a country that has plenty of these resources for the US to purchase as imports. Some resources are found in the US such as oil and natural gas but the production capacity of the US economy goes far beyond the utilization of the few oil resources available (Piana, 2001). The US can reach its maximum production capacity by importing additional quantity of energy resources as inputs to the economy’s production. The US also imports some agricultural products whose production can hardly be supported by the local climatic conditions.

The United States is technological leader in some products but some of the country’s consumption in technology is imported. Countries like Japan are leaders in motor vehicles and machinery, as well as other equipment. Japan is the US fourth largest supplier of goods and services according to 2011 facts in international trade between Japan and the United States. The US has more imports from Japan than its exports to the same country, a trend that has existed for over five years (US Trade Representative, 2012). The US Trade Representative (2012) further points out that vehicles, machinery, elec.............

Type: Essay || Words: 668 Rating || Excellent

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