One of the many ways conventional economic theory hinders our discussions of trade is that it gets us thinking about goods “produced” in one country and “consumed” in another. Mexicans grow tomatoes, drill oil, sew shirts, and assemble cars; Americans eat, burn, wear, and drive them.

Most trade in the real world does not look like this. What you have, rather, are commodity chains, where different parts of the production process take place in different countries. In most cross-border transactions, the buyers are not consumers, or even distributors, but producers who use the imported goods as inputs. And in many cases, the relevant transactions are not arm’s-length market exchanges, but transfers within a single corporate structure. Even the final purchasers may not be consumers: in general, investment goods and exports have higher imported content than consumption goods do.

Case in point: US-Mexico trade. With Donald Trump’s proposed 20 percent tariff, I was curious what US imports from Mexico actually look like. Here’s what the Census says: