Definition: Imports are the goods and services that are bought by residents, governments or businesses of a country, but made outside of the country. It doesn't matter what the goods or services are, or how they are sent. They can be shipped, sent by email, or even hand-carried in personal luggage on a plane. If they are produced in a foreign country and sold to domestic residents, they are imports.
For example, tourism products and services are still imports, even though they are sold to tourists outside of their country. In a way, when you travel outside the country, you are technically importing those souvenirs. (Source: Department of Commerce)
The U.S. is the and the European Union (EU) each import about $2.7 trillion in goods and services (2013 figures). China is the world's third largest importer, at $1.8 trillion. Germany is responsible for more than half of the EU's imports, at $1.2 trillion. All other countries import far less: #4 is Japan at $767 billion, #5 is the U.K. at $646 billion, and #6 is France at $640 billion. (Source: CIA World Factbook, Imports Rank Order)
What Does the U.S. Import?
The U.S. imported $2.3 trillion in goods and $.4 trillion in services in 2013. The largest categories are industrial machinery and equipment ($681 billion), capital goods ($548 billion), consumer goods ($533 billion) and autos ($309 billion). Most of the services are financial in nature. For more, see Components of U.S. Imports and Exports
Imports and the Trade Deficit
The U.S. usually imports more than it exports, even though its the third largest exporter in the world (after the EU and China). Although we CAN produce everything we need, China, India and other emerging market countries can make a lot of it for less than we can. That's because their cost of living is lower, and they can pay their workers much, much less.
Do Imports Cost U.S. Jobs?
Everything that is imported is also something that is not made in the U.S.A. For that reason, it can create unemployment in the U.S.
The biggest change occurred with the growth of imports from China. In 2007, 28% of all imports were from China and other low-income countries. This was a dramatic rise from 2000, when only 15% of import were from low-income countries. This happened at the same time that the U.S. lost manufacturing jobs. In 2000, more than 10% of the labor force worked in manufacturing. By 2007, this had dropped to 8.7%. (Source: The China Syndrome: Local Labor Market Effects of Import Competition in the United States, American Economic Review 2013)
This study also found that jobs losses hit some communities harder than others. The cities and towns that lost out to Chinese competition also experienced higher costs for unemployment compensation, disability payments, health care and early retirement. A study by Illinois Wesleyan University showed that one billion dollars in imports from China reduced U.S. manufacturing by .48%.
At the same time, imports do create U.S. jobs in transportation, distribution and marketing. For example, the Heritage Foundation estimated that imports from China alone created 500,00 of these jobs. However, it's unlikely that these job gains offset the job losses in manufacturing. For more, see How Jobs Outsourcing Affects the U.S. Economy.
Why Can't We Make It at Home?
Many people say we should only buy items that are "Made in America." That would, in fact, solve the problem if everyone were willing to pay higher prices. The cost of living in China, India and Mexico is much lower than in the U.S. This allows companies to pay lower wages. For example, Indian IT workers can be paid just $7,000 a year, much lower than the U.S. minimum wage. In other words, there's trade-off between plentiful U.S. jobs and low-cost products. For more, see How IT Outsourcing Affects the Economy. .Article updated July 1, 2014