… is from page 35 of Menzie Chinn’s and Douglas Irwin’s superb 2025 textbook, International Economics:
Imports are the benefit of trade, and exports are its cost. Imports directly increase consumers’ utility by making higher utility combinations of goods available than under autarky. Exports, however, do not directly benefit anyone inside the country; they are goods that are produced but given up to other countries. However, the revenue earned from the exports is what pays for the imports that enable consumption to be higher. In other words, the gains from trade arise from imports, and exports are the cost of acquiring imports.
DBx: Yes. This truth is fundamental.
Once you grasp this truth, you cannot help but see that protectionists aim to reduce the gains that their fellow citizens reap from trade. And you cannot help but be mystified that many of the people whose gains from trade are reduced by protectionism continue to mistakenly suppose that, by having their gains from trade reduced, they are somehow enriched.
The logic of the protectionist case is that it’s somehow beneficial for citizens of the home country to work as if they are slaves to citizens of foreign countries: Produce as much as possible for export and receive in return as little as possible. That’s the protectionist (il)logic.
