Why is trade so important to the world today?

Trade has always been important…Because no country can produce all the products and services that the population needs. To give you an example, imagine that each country is a person like yourself. You can’t build a modern house by yourself, you can’t make a car by yourself, you can’t generate the electricity by yourself. You rely on the services provided by other people. Others make the things you need, while you specialize in one service. Your work is a service to others, and others pay you for it.

The same thing applies to countries. A country cannot produce everything. Sometimes countries specialize in the production of certain commodities, manufactured products or services. Other countries like the U.S have a very diverse economy. However, diverse economies are often very complex and have a complex supply chain, where products are made of subcomponents, often originating from several different countries. For example, Ford may produce almost all of its cars in the United States, but many times components come from other places, like Mexico, or Canada. We buy from them to make new things. We make money, they make money…

Therefore, trade is very important for national and global economic growth, as we all depend on each other.