Question

Which country is the most important trade partner to the United States of America? Please explain why?

Answer 1

China is the most important trade partner of the US, so much that the US and China are together called co-joint twins.

China has established itself as an important manufacturing unit in the world which manufactures almost everything. And it exports many manufactures good to the US and have a trade in its favor by almost $500 billion. There are many US companies like Apple, Microsoft etc who get their goods manufactured in China.

The low cost of manufacturing also makes China an important trade partner. The goods manufactured there are cheap and increase the consumer surplus here in the US by creating extra demand at a lower cost. It allows the US companies to concentrate on the innovation and research and development of the products and utilize its knowledge economy better. China also has a comparative advantage in the low-cost manufacturing and US in Capital good they together decrease the wastage and utilize the resources well increasing the world welfare too.