Net Importer Meaning
A nation is considered a net importer when its total imports exceed its total exports. The commodities into the nation from another nation are referred to as imports. The sale of a nation’s merchandise in other nations is referred to as exports.
In other words, a country is a net importer when the total value of goods and services imported into a country exceeds those exported. Therefore, a net importer nation will always have a current account deficit.
Table of contents
- A nation is a net importer when, on an aggregate level, it buys more things from other nations through commerce than it exports to other countries.
- A net importer country will always have an overall current account deficit.
- It is to one’s advantage when some things that are imported may be purchased at a lower price than those that are produced locally.
- The primary disadvantage of this system is that imports have to be financed by borrowing, which drives up the total national debt.
Net Importer Explained
Net importer definition is the countries that import more than their exports. Countries worldwide are working to be more self-sufficient and lower their overall consumption costs by increasing their exports while decreasing their imports. This is because products and services manufactured in one’s nation are, on average, less expensive than those manufactured in other countries.
A nation or zone is a net importer if, on average, the value of the items and services it brings into the nation is more than the value of the goods and services it sends out. A net importer country will always have an overall current account deficit. However, it is also possible for it to run shortfalls or net profits with particular nations or regions. This is because the categories of products and services traded, the competitiveness, currency rates, government spending levels, trade restrictions, and other factors all play a role.
The Commerce Department of the United States records monthly tallies in various table presentations on exports and imports of goods and services. As per their overall total, the United States is now the top importer of foods and drinks, oil, passenger automobiles, auto components, medicines, mobile phones, and laptops. These are just some of the major product categories that fall into this category.
It is essential to remember that a nation might be a net importer in one sector of the economy while simultaneously a net exporter in other sectors. For instance, Japan is a net exporter of electrical gadgets, but to satisfy its oil demand, it must purchase this commodity from other nations.
#1 – Food
As per the report of USDA, China is the highest importer of food and agricultural commodities. With agricultural imports reaching a total of 133.1 billion dollars in 2019, China has surpassed the European Union (EU) and the United States to become the largest agricultural importer in the world.
In the realm of food, China is the third largest importer of fresh fruit in the world, with total imports having a value of $8.6 billion in 2019. The United States was China’s major agricultural supplier in the past, but Brazil and, more recently, the European Union have now overtaken them. Soybeans make up over 85 percent of Brazil’s total exports to China, but Brazil’s meat exports are also seeing significant expansion.
Additionally, China is the most important market in the world for importing dairy products, with a value of $12 billion in 2019. As a result of China’s record low utilization of dairy products, and its quick ascent from that low foundation, the Chinese market for dairy products is the most dynamic sector of the global dairy industry. Approximately 45 percent of China’s dairy imports comprised baby formula. The European Union and New Zealand are China’s two most important sources of dairy products.
#2 – Oil
In 2020, crude oil had a total transaction value of $640 billion, making it the third most traded product globally. However, the total value of crude oil exported fell by $35.5 percent from 2019 to 2020, going from $992 billion to $640 billion. The trading of crude petroleum accounts for 3.82 percent of all international trade.
As per the data of the OEC world, China ($150 Billion), the United States ($75.1 Billion), India ($59 Billion), South Korea ($42.2 Billion), and Japan ($38.4 Billion) were the top five countries that imported crude oil in the year 2020. This group of five big net importers of oil was responsible for roughly three-fifths (58.8%) of the world’s total expenditures on imported crude petroleum bought on international markets in 2021. This was the year that these expenditures were calculated.
At the level of the continents, Asian nations were the ones who spent the most on imported crude oil during the year 2021, spending a total of $563.8 billion on it, which represents 54.8% of the total amount spent globally. On the other hand, the countries of Europe came in second with a share of 26.7%, and North America received 14.6% of the total value of crude oil imports.
#3 – Natural Gas
The United States is the largest importer of natural gas that is still in its gaseous condition around the globe. In 2021, North America imported around 76.1 billion cubic meters of natural gas in its gaseous state. This number reflects a decline compared to the volume of gas imported into the United States in 2015, which was greater than 78 billion cubic meters. Mexico comes in at number two with a total of 61.7 billion cubic meters, and the United States is the third largest importer, per the report of Statista.
As per the OEC world data, with a total trade value of $99.6 billion in 2020, liquefied natural gas ranked as the 14th most traded product globally. Liquefied natural gas trade accounts for 0.59 percent of the total value of all international trade. The top five countries that imported the most liquefied natural gas in 2020 were Chinese, Taipei ($4.74 billion), Japan ($26.8 billion), South Korea ($14.2 billion), and India ($7.26 billion).
Net Importer Countries
As per the data of the world bank, with a total of $3,089,622.82 billion worth of goods imported, China is by far the world’s largest importer. The United States is in the second position with an import total of 2,774,597.00 million, and in the third position is Germany, whose imports total 1,770,614.28 million US dollars.
Nevertheless, net trade can be calculated by subtracting exports from imports. Therefore, net importers are the countries with total imports larger than their total exports. According to the findings of Statista, the top net importers are the United States of America, the United Kingdom, Brazil, Canada, India, and France.
Frequently Asked Questions (FAQs)
A country is considered a net exporter when, on a cumulative basis, it sells more items to foreign countries through commerce than it brings in from other countries. It denotes a nation that imports a greater quantity of a specific product than it exports.
Throughout history, China has been a net importer of food & agricultural goods since the growth of its agricultural imports has far outpaced the expansion of its agricultural exports. The country imported 28.35 million tonnes of grain in 2021, marking a 152% rise over the 11.3 million tonnes it imported in 2020.
According to the data provided by the Indian Government, India will be a net importer in January 2021 with a trade deficit of USD 14.75 billion. This is a 3.57 percent decrease from January 2020’s trade deficit of USD 15.30 billion.
This article has been a guide to Net Importer and its meaning. We explain the concept in detail, along with examples and countries. You can learn more from the following articles –