When approached strategically, globalisation strengthens rather than weakens America’s economic position, yet current debates about globalisation are too often missing the point, says Lilly, 17, from Hong Kong.
As I walk into the local supermarket, I am surrounded by products from across the globe – Portuguese wine, Japanese food, German toys. This is not just shopping, it is living proof of how globalisation has become the backbone of an economic reality.
Globalisation is heavily rooted in classical economic principles, such as Adam Smith’s “division of labour” and advocacy for “free trade”, which highlight how specialisation and trade without protectionism can enhance efficiency. The current debate about globalisation in America often misses a critical point: American factories are using those imported components to create higher-value products, while tech giants leverage global talent to maintain their edge. This is globalisation at work: not as a threat, but as the greatest economic multiplier.
In my analysis of global trade dynamics, globalisation systematically enhances productivity through specialisation and comparative advantage in the United States. By integrating into global supply chains, American manufacturers gain access to world-class equipment and materials that directly boost industrial productivity.
US manufacturing output surged by 8.5% in motor vehicle and parts production in early 2025 (according to Reuters), due in part to advanced robotics used in Ford’s Michigan plants, such as German-made systems, which increased precision and output capacity.
Strategic participation in global supply chains consistently yields these measurable benefits: greater output, reduced waste, and sustained competitive advantage.
Simultaneously, trade also allows American firms to secure cost-effective raw materials, which decreases production costs and frees up resources for investment in the competitive strengths of the US, particularly innovation and high-value engineering. Companies like Apple strategically source components globally while keeping core engineering in California – an approach that consistently delivers both cost savings and quality advantages.
The numbers bear out what I’ve observed – that by optimising supply chains internationally, US firms maintain production efficiency while freeing up capital to invest in the high-value activities where America excels. This balanced approach to globalisation, in my view, demonstrates how smart trade policy can simultaneously reduce costs and strengthen our competitive edge in critical sectors such as advanced engineering and technology development.
Trade helped the US improve efficiency through specialisation, expand production capacity and gain resources. The US has leveraged its comparative advantages in high-value sectors in international trade, including technology innovation, advanced manufacturing, and financial services.
These specialisations enabled US firms to achieve unprecedented economies of scale by having access to worldwide markets. Exports currently account for nearly 11% of US GDP, which increased from 9.2% in the 1990s, demonstrating how trade integration fuels broader economic expansion.
Trade has propelled US efficiency by modernising capital, optimising labour, and accelerating innovation, which enabled the country to dominate high-value global markets while maximising productivity.
Instead of retreating from global trade, America must refine it – by investing in workforce training to compete in high-value sectors, negotiating trade agreements that prioritise American innovation, and leveraging global partnerships to sustain competitive advantages.
Policymakers, business leaders, and citizens alike should recognise that isolationism risks stagnation, while smart engagement unlocks growth.
Let’s champion policies that amplify globalisation’s gains, because in today’s interconnected world, prosperity is not created in isolation, but through collaboration and strategic leadership.
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References:
Reuters. “US Manufacturing Output Accelerates in February.” Reuters, 18 May. 2025.
“Exports of goods and services (% of GDP) – United States.” World Bank Open Data
