From Don Boudreaux:
... U.S. exports ... unloaded on foreign docks generate money income for American producers.
But what’s the value to Americans of receiving this money? Ultimately, that value is what this money can purchase abroad – the amount of goods, services, and assets that Americans are able to buy in foreign countries.
The only reason for exporting is to import – and the success of a country’s exports is measured by the value of imports these exports fetch in exchange (either currently or in the future). That’s why all the talk of imports and trade deficits being drags on the economy is so misleading.
Keeping in mind that the ultimate value of buying assets in foreign countries lies in enabling their owners to increase their consumption in the future, the point remains that the success of American efforts to export is measured by the value of imports that we Americans receive in return for our exports. The more imports per unit of export, the better off we are.
But isn't it possible that some people would like to export so as to accumulate wealth through saving, and not spend the earnings on either domestic products or imports? How do we deal with different preferences for saving as between countries? Do we need to deal with it at all?
On a slightly related note, here is a video from Don Boudreaux on protectionism:
