Assignment# 6 Find one or more articles about a good/service the United States exports and a good/service the United States imports. In a well-written paper, explain the following: Discuss what this suggests about the United States’ absolute and comparative advantage when it comes to this good/service. Using the concepts of supply and demand, discuss what effect a “Buy American” campaign might have in the market for the imported good. Given what economists have to say about comparative advantage, would such a campaign be good or bad? Adhere to the following standards: Your paper should be two to four pages in length, not including the title or references pages. Review the grading rubric, which is be found in the Week 2 folder. Incorporate at least three scholarly references that are not required readings for this module. The CSU-Global Library is a good place to find these references. Be sure to follow the CSU-Global Guide to Writing and APA Requirements. Each paper should include an introduction, a body with at least two fully developed paragraphs, and a conclusion.


International Trade




Tutor’s Name

Course Title and Number

Date International trade


International trade is the driving factor of most economies in the world. This is because there will be exchange of goods and services between two countries that will benefit both parties. It is very imperative for a country to be part of international trade for it will be able to expand its markets to sell surplus production. It also helps to widen the consumer sovereignty because of variety of goods and services that will be available for sell in the market (Zhang, 2008). Exports is a country’s source of income. Without this a country may not be able to earn any form of foreign exchange because there will be no exchange transactions that will be taking place. Imports help a country to have commodities that are inadequate for its consumption thus making them to buy outside the country to facilitate its development. In one way or another, exports and imports have a huge effect on a country’s economy.

The United States is majorly known for its machinery export. This is a capital extensive production where the US has been able to capitalize on its own resources in order to manufacture the best machinery. The exports of machinery are about 13.1% of the total exports and brings in about $190.5 billion. Even though this a good sign, the investments of machinery is yet to pick up due to the slow economy recovery rate in the US. The US has an absolute advantage in the production of machinery because it is able to produce more of the machinery even with the limited resources such as investment (Schumacher, 2012). This can be seen through the exports figures that it is highly demanded. The US has also shown that it has a comparative advantage of producing machinery because it is able to produce at a relatively lower opportunity cost than other commodities.

The highest imports made by the US is the Electrical machinery where the country was able to buy goods worth $336 billion which is about 14.9% of the total imports. For a country to import, it shows that it does not have neither absolute advantage nor comparative advantage because it is unable to produce efficiently using the limited resources thus forcing them to import from countries that have surplus production (Novy, 2013). Due to this, there has been an introduction of “Buy American” campaign which tends to promote the local production of goods and services in the country. The campaign is after promoting what local industries are producing and giving them a platform to showcase their goods so that people can stop importing and buy what is produced locally.

This has an effect in the market because the imported goods will not be sold to the people. This will make the demand of import goods to be low, because people are buying the local manufactured goods. The country will also be in a position to correct its balance of payment since there will be possible reduction of imports (McGee, 2014). Sub standards goods will not have a chance of accessing the market hence also helping to regulate dumping of goods in the country. In respect to the level of comparative advantage, the campaign is not advisable because the country is not in a good position to produce a relatively lower opportunity cost in terms of the forgone goods. Therefore, the campaign is not good for the local manufacture will experience high costs in production.


It is very advisable for a country to ensure that they are able to highly utilize it resources so that they can be able to manufacture their own goods and services. This is because it will make the country to have low importation costs thus helping it to have a favorable balance of payment. Imports tend to reduce the GDP of a country while exports increase the GDP of a country significantly. Therefore, the united states should be able to produce surplus goods that can satisfy its population and eventually sell the excess in order to increase its GDP.



Laursen, K. (2015). Revealed comparative advantage and the alternatives as measures of international specialization. Eurasian Business Review, 5(1), 99-115.

McGee, R. W. (2014). Trade. John Wiley & Sons, Ltd.

Novy, D. (2013). Gravity redux: measuring international trade costs with panel data. Economic inquiry, 51(1), 101-121.

Schumacher, R. (2012). Adam Smith’s theory of absolute advantage and the use of doxography in the history of economics. Erasmus Journal for Philosophy and Economics, 5(2), 54-80.

Zhang, W. B. (2008). International Trade Theory. Springer.

Retrieved from Jan 9, 2017 Patricia Panchak | US Manufacturing Trade P., Panchak . (n.d.). US Machinery Industry Exports Poised for Uptick. Retrieved May 06, 2017, from


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