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Commitment to Local Economies Through International Trade Vital to Business

All economists agree that trade is a vital component in any economy, but the value of international trade to local economies is often overlooked because the benefits are often hidden. The dollar value of imports and exports are difficult to keep track of when the distribution system runs through so many stages. It can be hard to tell exactly what constitutes an import or an export when a product contains portions of both. Automobiles are an excellent example of this. In the United States, General Motors is generally viewed as an American automaker, but G.M. makes many of its cars overseas, and many of the components of the cars it assembles in the United States are fabricated in foreign countries. Honda, on the other hand, is seen as a Japanese automaker, but Honda assembles many of its cars in the United States, and even the cars it manufactures in Japan and brings into the United States contain many American-made components. The disruption caused by the Japanese earthquake and tsunami stopped production for many Japanese parts makers, but its effects were also felt by many local economies in the United States that were dependent on these materials. The supply chains of… read more »