I'm sorry that I can't find the original article, but it's not that simple. Who's our largest trading partner? Canada. Now, honestly, what does Canada produce that a) we can't make here for the same or lower cost and b) is worth 224 billion dollars? It is vastly more likely that the trade happens simply because shipping is cheap and profit margins outweigh it by enough that Canadian companies will sell inside the U.S.. Ricardian exchange does not represent how we trade, and so arguments from it without deeper analysis, like the one Krugman uses for trade with countries with cheap labor, will not assuredly apply to the real world.
Who's our largest trading partner? Canada. Now, honestly, what does Canada produce that a) we can't make here for the same or lower cost and b) is worth 224 billion dollars?
You're not entirely wrong about that...
Often things are made somewhere simply because that's where they were made in the past, and, as you said, it's easier to ship the goods than to set up shop somewhere else. In the case of trade between the United States and Canada, most of the relevant comparative advantages occur on the level of firms and individuals, not nations.
I would like to learn more about economics but I don't know where to start. Can lesswrong suggest specific areas of economics that are particularly useful for understanding and optimising the world? Specific suggestions such as reading lists and resources would also be much appreciated.