Definition: Import represents the bringing of foreign goods or services in another country, where the products will be processed, used, sold or exported.
What Does Import Mean?
What is the definition of import? Imports, along with exports, are a key element in a country’s balance of trade as the lower the value of imports, the more positive the balance of trade in an economy. Countries that have high import levels face a trade deficit, and they need to increase their reserves to pay for the imported goods.
Furthermore, there are countries, mostly in the under-developed or the developing economies, which rely on imports of basic commodities, such as oil and industrial materials. Generally, countries tend to import goods or services that they cannot produce at the same low cost or with the same efficiency that other countries can.
Let’s look at an example.
Countries that import goods are using trade protectionism measures, such as tariffs and duties that impose a tax on imports. The tax immediately raises the price of the imported goods, making them more expensive for domestic consumers and consequently less competitive compared to domestically produced products.
A great example of import tariff is the Smoot-Hawley Tariff, introduced in 1930 to protect the U.S. farmers from the agricultural imports from Europe. The tariff raised the import taxes seeking to protect the American farmers from the increasing imports of European goods. However, the tariff is viewed as one of the reasons that put a strain on the international economic climate, leading other countries to retaliate, thereby restricting the global trade and leading to the Great Depression.
Another way of protecting domestic industries is when the government imposes a subsidy on local industries with tax credits to lower the price of locally produced goods and services. The measure makes the domestically produced goods cheaper when exported to foreign countries. For example, the Agricultural Adjustment Act (AAA) of 1933 allowed the U.S. government to impose a tax on local farming industries to subsidize local farmers in order to lower their crop or livestock production. The Act was seeking to reduce crop and livestock surplus.
Define Imports: Import means a good that originates in a foreign country and is shipped domestically for sale or trade.