International Trade and Finance - Speech or Presentation Example

A trade deficit (excess import over exports) has a direct and stern upshot on the value of the U.S. dollar. A massive trade deficit means that the U.S. is spending more funds overseas than in its own homeland (Colander, 2010). The country’s manufacturing profit is lower than its consumption profit. Trade deficit, combined with the government’s large budget deficit, speeds up the decline of the dollar’s value. The trade deficit, talking in relation to buying power of the dollar, is the third rail of the market (Colander, 2010).

The United States formerly used to manufacture goods and sell them, not just here at home, but all through the globe. The country led the way, but not any longer. The shift away from control, in the manufacture of things individuals need, has allowed other nations such as, India and China to pass the country (Colander, 2010). Now the United States has become a buyer rather than a seller (Colander, 2010). Take a product like oil for instance. America imports a lot of oil from the Arab nations.

The importers, due to this, take advantage of the United States, and decide to raise oil prices whenever they want. This affects businesses and other normal consumers severely (Colander, 2010). Question 2 In order to comprehend international trade, it is essential to identify what the effects of foreign trade have on the domestic markets, GDP and university students. Foreign trade is fundamentally when nations exchange products (Colander, 2010). If a nation’s net exports are positive, then the nation’s GDP goes up, but if they are negative, then GDP goes down (Colander, 2010).

Every state wants their GDP to be greater rather than other nations. Therefore, every state wants their net exports to be positive. It is, however, not possible for every nation to have positive net exports since one or more nations have to import more than they send abroad if the others export more than they bring in. America is one of the key contributors to foreign trade (Colander, 2010). In reality, our GDP is tremendously impacted since we are enormous importers. We depend highly on products from other nations than what we sell abroad.

This not only affects our GDP, but also has an upshot on our domestic markets since we are purchasing more from nations abroad. For a university scholar who is considering opening a business, as an instance, when they leave school the effects can be tremendous when they enter a market where there is a strong contender abroad. Question 3 The U.S. government makes numerous choices especially when it comes to money matters (Colander, 2010). The crucial question is how these choices, in line with quotas and tariffs, affect foreign trade and relations?

First and foremost it is essential to recognize that quotas and tariffs are, in place, to support the government in making choices on how much amount they will agree to have exported and imported (Colander, 2010). Tariffs and quotas, in addition, help the U.S. government determine the sum of taxes, which will be collected so as to avoid discarding of those products. Foreign traders are encouraged to play their part in international trade through having exchange rates in place (Colander, 2010).

There are also government regulations that help to avert certain products from entering our nation. In reality, the main aim of the U.S. government and the choices, which they make concerning quotas and tariffs, is to do what is paramount for our country to keep it lucrative and