A certain sign of country prosperity is the ubiquity of foreign goods and businesses in that country. Markets are wise, and it’s in the countries where foreign producers are aggressively pursuing and gaining market share the most that you know the future is brightest.
Which is why if you’re American and eager to develop a sense of what’s ahead for the U.S. economy, look at what’s for sale in shopping malls, online, or perhaps easiest, look around as you drive around. What’s the make of the car you’re driving or riding in, and what’s the make of the cars idling next to you?
It’s a useful exercise given the impressively wide range of foreign models. What a bullish signal about the present, and similarly about the future. Not only are markets wise, they’re also a look ahead. The ubiquity of foreign goods is a powerful market signal revealing just how much the world’s producers make their business all about pleasing Americans.
Yes, a major sign Americans are so well-to-do can be found in the staggering inflow of foreign plenty. Nothing signals rich like imports.
Consumers can only consume after they’ve produced first, and the towering abundance of foreign production available to U.S. consumers is a sign of how popular U.S. production is globally. To put it simply, we Americans buy so much from the rest of the world precisely because we produce so much for it.
About our copious importing, it’s notable that U.S. tariffs levied on foreign goods are light. Not zero, but very light. While the ideal U.S. economic scenario would be one of no tariffs on foreign goods, the roughly 1.2% average across all foreign products and services indicates that the U.S. is near-totally open to the world’s plenty. Added to the latter, the United States itself is a 50-state zone of free trade that similarly drives enormous prosperity.
Why is this? The answer is simple, and it’s rooted in the division of labor that we all intuitively understand. The more we’re able to divide up work with as many hands and machines around the world as possible, the more we’re able to focus on the specialty that most elevates our unique skills and intelligence, and that by extension lifts our productivity.
Considering the above through an academic prism, what was your favorite subject in school? And what was the subject, or subjects that had you dreading going to school? Having thought about it, hopefully readers can then see education as a metaphor for open markets. Free trade is the economic equivalent of going to school every day in order to do the work and study that most reinforces the individual brilliance that resides within us all, all the while avoiding the subjects we loathe.
Which explains why stupendous imports into the U.S. are much more than a sign of immense U.S. prosperity. Much more important, those imports free us to do the work that most suits us, and as such they’re a crucial driver of our prosperity.
All of this rates attention as Chinese companies increasingly vie for market share in the United States. Talk about bullish. Think how much more specialized Americans will become as they get to divide up work with even more people, machines, and processes in one of the world’s largest countries. How enriching, but also how peaceful. Seriously, who would want to shoot at their best customers?
Still, some view the arrival of Chinese companies like fast fashion retailer Shein as a negative. Unknown is why. What could be more flattering to Americans than to have the world’s largest fashion retailer catering to our needs? If so, we win three times, but realistically many more.
For one, we have yet another business working diligently to get us the clothes we want in the style we want much more affordably. For two, the competition will force others vying to serve us to improve themselves by improving what they do for us, and for three, the division of labor is once again what has made the U.S. the richest country on earth. You quite simply cannot separate the two. In other words, foreign companies operating stateside can only prosper insofar as Americans prosper even more.
Absent our freedom to import without regard to a company’s country origin, Americans would have to produce a lot more for themselves, as opposed to being produced for. In academic terms, it would be like going to school every day and being required to study subjects one loathes. Translated, if you hated school, of even if you hated aspects of school, you’ll love free trade simply because it loves you back in the form of work that amplifies your genius.
