Domestic industry refers to manufacturers that produce goods within their country of residence. Domestic-industry products are sold in the country in which they are manufactured. but also can be exported, according to The World Trade Organization. Domestic industries usually consist of energy-related businesses, plastic or metal manufacturers, and agriculture or textiles. These goods contribute to the overall gross domestic product of a country.
Domestic Industries In The U.S.
The United States exports many domestic industry products globally. The U.S. Census Bureau and the U.S. Bureau of Economic Analysis reported that about $2 billion of industrial supplies were exported in June 2011. This compares to the $15.8 billion of industrial supplies that were exported from June 2010 to June 2011. Food is another large domestic product: $800 million in food and beverage products were exported in June 2011 alone. From June 2010 to June 2011, $1.5 billion in food products were exported. Consumer goods also traded well, raking in $700 million from exports for June 2011 and $1.2 billion in exports from June 2010 to June 2011.
Domestic Products and Dumping
There is concern that importing products that are produced within domestic industries can prompt dumping, or unfair competition within the market. If a company exports a product but sells it at a price lower than its domestic manufactures sell it for, it is considered dumping, according to The World Trade Organization and the US Department of Commerce. In the U.S., the government may combat dumping if it is harming an industry by imposing tariffs on foreign companies that sell a product. Whether or not the U.S. government imposes a tariff depends on the industry and "dumping margin", or the difference between the cost of the product in a foreign market and the US market.
Importing products that compete with domestic industries has spawned protectionism in many countries. Protectionism is restraining goods by issuing tariffs or restrictive quotas on businesses. By importing products, the government has put a strain on some industries, causing them to have to restructure, cut costs and lay off workers, according to the Congressional Budget Office. Examples include textiles, metals manufacturing and mining. The government can restrain the imports and normalize the market to help protect and revitalize industries. The footwear, car and steel industries have all benefited from protectionism, according to the Congressional Budget Office.
The clothing industry is being affected by international trade. Nearly 36 percent of all shoes and clothing purchased in the U.S. get manufactured in China. This compares with the 25 percent of US shoes and clothing manufactured domestically and purchased domestically, according to an article in USA Today. Craig Shearman, a spokesman for the National Retail Federation, told the newspaper that most retailers manufacture clothing in China, India or Vietnam because the costs are less.
- Juris International: World Trade Organization
- Bureau of Labor Statistics: Textile, Textile Products and Apparel:
- World Trade Organization: Marrakesh Agreement:
- Bureau of Labor Statistics: Imports and domestic employment: identifying affected industries
- Bureau of Economic Analysis: U.S. International Goods and Services June 2011
- Congressional Budget Office; "Has Trade Protection Revitalized Domestic Industries?"; November 1986
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