Econ Reporters Are Consistently Wrong About Imports and GDP
2025-05-03
Almost all economics reporters make a simple mistake: claiming that imports subtract from GDP. In reality, GDP measures production within a country's borders; imports are produced elsewhere. While imports affect net exports, their impact on consumption or investment offsets this, resulting in no net effect on GDP. This error likely significantly influenced US economic policymaking, such as tariffs based on a misunderstanding. The author suggests that while an import surge may coincide with a GDP drop, this is likely due to measurement error, businesses diverting resources from domestic purchases to import stockpiling, or imports obscuring the forecasting picture, not because imports themselves reduce GDP.