Benefits of international trade include the ability of countries to exchange what they have and can produce at a comparative advantage for goods and services that they lack. International trade is good for businesses because it allows them to maximize their production resources and may lead to economies of scale. Increased competition in the global marketplace can help to keep prices down, which is good for consumers. In addition, consumers benefit from the increase in choices. Factors that contribute to international trade include improved transportation and communication, which makes it possible, for example, to grow food in one part of the world and deliver it for consumption in another.

Question

What will be an ideal response?

Answer 1

International trade makes up a significant portion of U.S. GDP, including the export of transportation and other services (e.g., insurance, banking, education, and tourism), capital goods like aircraft, industrial supplies such as chemicals and plastics, and consumer goods including pharmaceuticals, entertainment products (films, music, books, etc.), food, and automobiles. Major imports include crude oils and petroleum products, consumer goods, capital goods such as computers, food, and motor vehicles. In its early history, U.S. foreign trade was conducted largely with Europe, particularly, Great Britain, but over time new trading partners have emerged, including our neighbors Canada and Mexico, along with China, Japan, and Germany.