What is an {term}? Import

An import is a good or service brought into one country from another. The word "import" is derived from the word "port" since goods are often shipped via boat to foreign countries. Along with exports, imports form the backbone of international trade. If the value of a country's imports exceeds the value of its exports, the country has a negative balance of trade.

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Import

BREAKING DOWN Import

Countries are most likely to import goods that their domestic industries cannot produce as efficiently or cheaply as the exporting country. Countries may also import raw materials or commodities that are not available within its borders. For example, many countries import oil because they cannot produce it domestically or cannot produce enough to meet demand. Free trade agreements and tariff schedules often dictate which goods and materials are less expensive to import. With globalization and the increasing prevalence of free-trade agreements between the United States, other countries and trading blocks, U.S. imports increased from $473 billion in 1989 to $2.9 trillion in 2017.

What Affects Imports

The United States' largest trading partners include China, Canada and Mexico. Two of these countries are involved in the North American Free Trade Agreement that was implemented in 1994 and, at the time, created one of the largest free-trade zones in the world. With very few exceptions, this allowed the free movement of goods and materials between the United States, Canada and Mexico.

It is widely believed NAFTA has reduced automotive parts and vehicle manufacturing in the United States and Canada, with Mexico being the main beneficiary of the agreement within this sector. The cost of labor in Mexico is much cheaper than in the United States or Canada, pushing automakers to relocate their factories to Mexico.

Large Imports Reduce Manufacturing

Free-trade agreements and a reliance on imports from countries with cheaper labor are responsible for a large portion of the decline in manufacturing jobs. Free trade opens the ability to import goods and materials from cheaper production zones and reduces reliance on domestic goods. The impact on manufacturing jobs was evident during between 2000 and 2007, and it was further exacerbated by the Great Recession and the slow recovery afterward.

Imports vs. Exports

The United States has experienced a trade deficit since 1975. Economists and policy analysts are split on the positive and negative impacts of imports. Some economists argue that the continued reliance on imports means reduced demand for products manufactured in the U.S., while other say imports enhance the quality of life with cheaper goods. Economists feel these cheaper imports compared to domestic manufacturing have also helped prevent rampant inflation.