What is an Import? - Definition & Example

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  • 0:00 Imports All Around You
  • 0:56 Why Do Countries Import?
  • 2:21 Examples
  • 3:26 Lesson Summary
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Lesson Transcript
Instructor: Aaron Hill

Aaron has worked in the financial industry for 14 years and has Accounting & Economics degree and masters in Business Administration. He is an accredited wealth manager.

Are those shoes you just got an import? How about that new vehicle that you bought or leased? Find out what imports are and why countries buy goods and services from other countries. Learn about some of the most common imported items today.

Imports All Around You

Do you know where those blue jeans you're wearing came from? How about your shirt? There is a good chance that your whole outfit was imported from another country. But your best friend said those jeans were actually made in your hometown. How could they be imports, you ask? What your friend may not have told you is that the denim and cotton used to make the clothes were actually bought from another country. In today's world, many of the goods and services we use are a combination of several different countries' involvement.

Imports are goods and services that are bought by residents of a country, but are made outside of the country. They can be shipped, sent by mail, or even brought back in your luggage from a plane ride. If they are produced in a foreign country and sold to domestic residents, they are imports. The European Union, United States, China, Japan, and France are five of the biggest importers of goods.

Why Do Countries Import?

Countries import goods for several reasons. It is important to note that most countries are not completely self-sufficient and, even if they wanted to be, it would come at a high cost that isn't in their economic interest. For this reason, countries choose to import many goods and services.

First, countries import goods or services that are either essential to economic wellbeing or highly attractive to consumers but are not available in the domestic market. Oil and natural gas are an example of this for many countries. These countries either don't have any natural production or not enough oil to support the demand and lifestyle that their citizens require, so they rely on purchasing these fuels from other countries who do. Coal, copper, nickel and iron are other common natural resources that some countries need but don't have.

Another common type of import are goods or services that can be produced more inexpensively or efficiently by other countries, and therefore sold at lower prices. Many countries have the ability to produce goods that they choose to import, but often it is in their best interest to import the goods at a lower price due to higher workforce costs and wages, higher cost of materials, or technology and infrastructure challenges they may face. Think of the clothing you're wearing. There is a good chance that it was made outside of the USA, and as a result the shirt only cost you $25 instead of $45. The country we imported it from could produce it at a lower cost and within acceptable quality standards.

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