What would the effect on world trade be if all companies around the world supported America by buying products that are made by Americans?
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If all companies around the world bought American-made products, world trade as a whole would decline and the world would be worse off. The reason for this is comparative advantage. Various countries have a comparative advantage in various products. A country that has a comparative advantage makes the product at a lower opportunity cost. When all countries make products in which they have a comparative advantage (and then trade), more goods are made world-wide. If only the US were making goods, the benefit of comparative advantage would be lost and fewer goods would be made cumulatively by the countries of the world.
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