U.S. Trade Deficit Measures America’s Success. @danielgriswold @mercatus
“…Counting a transshipped good as an import but not an export would make as little sense as counting it as an export but not an import. It is both or neither. Its impact on the amount of goods in the domestic economy is effectively zero, with the import and export effectively cancelling each other out. The re-export of goods should not bother mercantilists, since the good is not consumed in the U.S. and, therefore, not threatening to displace competing domestic production.
The reality of trade is that even transshipments benefit the economy by creating opportunities to add value as a hub for global distribution and logistics. Hong Kong and Singapore have grown rich in large part because of their prominent roles as re-exporting nations.
Hundreds of thousands of good-paying jobs have been created in the United States in seaports and airports that handle the transshipment of goods and in sophisticated distribution centers that direct goods to their final destinations at home and abroad.
South Florida, for example, has become an important hub for the distribution of products to markets throughout Latin America. The region supports a thriving network of warehouses, distribution centers, and busy ports that handle both U.S.-made and foreign-made goods for export….”