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The Economic Impact of Globalization on the US

Info: 1135 words (5 pages) Essay
Published: 22nd Mar 2021 in Economics

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The extensive globalization has resulted in the connection of various countries. As a result, the United States government has been forced to initiate agreements and other aspects to nurture relations. In the process, it has been easier to access better opportunities and the ability to expand the existing multinational brands. However, some negative consequences have arisen due to these new circumstances. This essay evaluates how globalization has resulted in adverse economic implications on the US regardless of the fewer benefits captured.

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On the other hand, employment has reduced in developed countries due to the reduced production costs in developing nations. The situation has resulted in negative implications that might interfere with the economic well-being of these countries. Reduced production costs, lower taxes, and improved infrastructure in developing nations like China, India, Mexico, and Malaysia have encouraged more Western companies to seek other opportunities (Denicolai, Strange, & Zucchella, 2015). For instance, companies such as Apple, Nike, H&M, and Dell have been outsourcing labor from other countries (Denicolai et al., 2015). Based on these factors, more companies are also moving their production plants to enjoy such opportunities. Unfortunately, only these firms are benefitting from offshore outsourcing, yet the economic growth and employment rate have suffered. For instance, the unemployment rate has increased in the offshoring country because all the manufacturing jobs have been moved to abroad countries (Gurtu, Searcy, & Jaber, 2016). The scenario highlights how globalization has resulted in some negative implications that are undermining the effectiveness of the ideology.

Globalization has encouraged the idea of free trade that allows more economic activities, but it is also associated with some adverse implications. Free trade has been popular due to the ability to lower tariffs, barriers, quotas, and offer more subsidies (Paul, 2015). In the process, countries have been free to engage in trade activities without any serious concerns. The situation has allowed even the developing countries to access a broader market, thereby increasing the profitability that they want. However, free trade has resulted in other members of an agreement dumping their goods in the United States (Paul, 2015). The scenario has resulted in adverse consequences on the operations of American firms. For instance, the presence of more foreign products might create a higher competition for the domestic entrepreneurs that want to benefit from the free trade (Paul, 2015). Furthermore, the concern of income inequality has arisen due to fewer economic elites benefitting from free trade, while the majority do not get more opportunities. The situation has led to widespread opposition against globalization because Americans are not getting the benefits that they were hoping to get after the emergence of globalization.

The widespread concept of global trade has allowed multinational companies to enjoy more benefits. Most importantly, global trade can contribute to multinational companies getting a broader market while the consumers will access a wide range of products, too (Paul, 2015). Hence, the profitability of these brands will contribute to American economic growth. However, increased import competition might undermine some of the domestic industries in that particular business area (Paul, 2015). Evidently, most of the foreign brands might offer lower prices that Americans will prefer at the expense of the domestic firms.

Globalization has resulted in extensive technological adoption and endless innovations since the US can share ideas with other countries. For instance, India has been one of the countries that have invested in technological development, and various applications and innovations have arisen from the country. As a result, India has experienced a higher number of foreign research and development centers that are taking advantage of the “attractive policies like tax breaks, knowledge parks, and multiple knowledge hub” (Patra & Krishna, 2015, p. 2). In the process, these foreign companies are sharing vast knowledge with the local Indian firms with the aim of enhancing their innovative ideas. The emergence of India and China as leading technological nations has nurtured a sense of competitiveness among other nations like the United States, South Korea, and Japan. Such competition has resulted in more information that is fostering innovative ideas in the US.

Based on the analysis of the economic outcomes associated with globalization, it is evident that the US is experiencing more adverse implications in comparison to the benefits. The reduced production costs in other countries have resulted in offshore outsourcing among American firms. Such issues have caused unemployment among Americans that were working in manufacturing plants for companies such as Apple, Dell, and Nike. Furthermore, even free trade has resulted in extensive dumping of cheaper products from other members of the regional agreements that the government has made. Hence, the increased import competition might interfere with the domestic industries because consumers will prefer cheaper products from overseas. Perhaps, the US government should evaluate how to get rid of these negative implications to enhance the effectiveness of globalization. 

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In conclusion, globalization has contributed to negative economic implications that have undermined the chances of American society attaining positive outcomes. For instance, free trade has resulted in extensive dumping and domestic entrepreneurs suffering due to these circumstances. Even the offshore outsourcing has made Americans to lose jobs because more prominent brands have shifted their production plants to other developing nations. Only the American multinational companies are benefitting from the broader market and the increased innovation. The government should even try to eliminate the negative consequences.


  • Denicolai, S., Strange, R., & Zucchella, A. (2015). The dynamics of the outsourcing relationship. In The Future of Global Organizing (pp. 341-364). Emerald Group Publishing Limited.
  • Gurtu, A., Searcy, C., & Jaber, M. Y. (2016). Effects of offshore outsourcing on a nation. Sustainable Production and Consumption, 7, 94-105.
  • Patra, S., & Krishna, V. (2015). Globalization of R&D and open innovation: Linkages of foreign R&D centers in India. Journal of Open Innovation: Technology, Market, and Complexity, 1(1), 1-24.
  • Paul, J. R. (2015). The cost of free trade. Brown Journal of World Affairs, 22(1), 1-20.


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