How To Write An Eco 372 International Trade Speech
International Trade and Finance Speech
Tracy Welle
ECO/372
September 7, 2013
Paul Updike
International Trade and Finance Speech The United States is known for its international trade. International trade allows the United States exchange goods and services. International trade plays an important role in the United States economy. A topic to cover is how imports and exports have an effect on businesses and consumers. The speech will cover the effects of international trade to GDP (Gross Domestic Product), domestic markets, and university students. This speech will also cover how government choices in tariffs and quotas affect international relations and trade, what foreign exchange rates are and how to determine it, and why goods from China are not restricted and why the United States do not minimize amount of imports from other countries.
Surplus of Imports Brought into the United States …show more content…
A surplus occurs when the United States have more imports than exports that leads to a trade deficit.
When there is a surplus of imported goods in the United States, it causes the price or that product to fall. According to “Amadeo” (2013), “Automotive is a category where the United States ran a trade deficit in 2012. It imported $298 billion worth of cars, trucks and auto parts, while only exporting $146 billion, running a deficit of $152 billion” (Consumer Products and Autos Contribute to the Deficit). A company that has a high amount of surplus means the company is making money allowing it to invest the surplus in new services, employees and other needs the company have (Hamel, 2013). A surplus can cause businesses to increase prices causing consumers with a less surplus to not buy its products. Surplus can cause businesses to increase or decrease product prices that affect consumers’ ability to make a
purchase.
Effects of International Trade to GDP, Domestic Markets and University Students The United States depends on international trade, export and import of goods and services. According to “Infoplease” (2013), “Nations want their GDP to be higher rather than lower, so nations want their net exports to be positive” (para. 1). International trade has played an important role in the United States economy. If the United States exports are positive, the GDP will increase and if the exports are negative, the GDP will decrease. International trade can affect a domestic market. If a domestic market has a product and another company has the same product made in another country that company can have a lower price than the domestic market. A domestic market can struggle if it cannot compete with imported products. International trades also affect university students because with more imports occurring there could be fewer positions available. As the United States imports more than it exports, this creates more jobs in other countries as demand of products increase. GDP, domestic market, and university students are affected by international trade because the United States chooses to make purchases in other countries.
Tariffs and Quotas “Tariffs are taxes governments place on internationally traded goods and quotas are quantity limits placed on imports” (Colander, 2010, p. 458). The government can see a high in revenue from tariffs. So, the government can choose to raise or lower tariffs with other countries. According to “Investopedia” (2013), “International trade increases the number of goods that domestic consumers can choose from, decreases the cost of those goods through increased competition, and allows domestic industries to ship their products abroad” (para. 1). A government may charge a tariff if it believes the product imported could be a threat to consumers (Investopedia, 2013). A foreign country’s government can also do the same with imported products from another country. Quota limits products to import. For example, the United States sale 20,000 of engines each year, but the government decides to only sale 10,000 this year. The United States gets an import quota for 10,000, the government has to tell other importers that they will not be accepting their products that could result in problems with the international relation between countries.
Foreign Exchange Rates “Exchange rate is the rate at which one country’s currency can be traded or another country’s currency. The exchange rate is determined in what is called the forex market (foreign exchange market)” (Colander, 2010, p. 480). For example, if one in the United States wants to purchase a good for 150 euros, he/she needs to purchase 150 euros. If the exchange rate is $1.20 for one euro, he or she will pay $180 in U.S. dollars to get 150 euros (Colander, 2010). “To demand one currency, one must supply another currency” (Colander, 2010, p. 481). When the demand rises and the supply falls the exchange rate appreciates, but when the demand falls and supply rises the exchange rate depreciates. If a foreign country does not want to buy goods from the United States, the demand for US dollars will fall in the forex market causing dollars to depreciate.
The Unites States Restricting Goods from China Restricting goods from China can be an advantage and disadvantage of the United States as well as China. According to “Alden” (2012), “If the United States restricts Chinese imports, China will respond by restricting imports of U.S. goods, in turn leading to further U.S. restrictions and so on and so on until trade between two countries plummet” (para. 3). If the United States restricted goods from China, it will create more jobs in the United States causing prices to rise. It will be an advantage for creating jobs but a disadvantage for raising prices. People will struggle to make a purchase and will also increase the need of government assistance. With China importing goods to the United States, the demand of products increases whereas if the United States restricted goods from China demand of products would decrease. This will affect consumers, businesses, and the economy.
Minimize Imports from Other Countries As the United States depends on international trade for goods and service, it could cost more to make those products in the United States. If the United States minimized imports from other countries, prices will skyrocket causing people to struggle even more. The United States will compete with its self to survive. If imports stopped happening, the cost of regulations of manufacturers will be expensive therefore, it probably would be better to import goods. If the United States minimizes imports from other countries, those countries will either minimize or stop accepting imports from the United States. The United States is a home of freedom, minimizing or stopping imports will take away the freedom of choice from people. Instead of the freedom of choice people will have to buy products made in the United States (not that it is a bad thing) that is more expensive than what a made in China product would cost.
Conclusion
International trade is important in the United States, because most products are from other countries. Surpluses can cause a trade deficit when the United States imports exceed exports. A surplus of cars, for example can cause a business not to make money if they have to reduce the price to make it sell. International trade has effects on the GDP as it can increase it, domestic markets can find it hard to compete with imported products, and international trade can cause university students to have a hard time finding employment. International trade helps the United States offer low prices to its consumers, helps businesses make money, and has helped economic growth. To eliminate or minimize imports, it can cause problems between countries and their economy. International trade has its advantages and disadvantages of the United States.
References
Alden, E. (2011). The Diplomat: A U.S.-China “Trade War”: Time to Abolish a Silly Notion Retrieved from http://thediplomat.com/pacific-money/2012/10/31/a-u-s-china-trade-war-time- to-abolish-a-silly-notion/
Amadeo, K. (2013). About.com: The U.S. Trade Deficit. Retrieved from http://useconomy.about.com/od/tradepolicy/p/Trade_Deficit.htm
Colander, D. C. (2010). Macroeconomics (8th ed.). Boston, MA: McGraw-Hill/Irwin. Retrieved from University of Phoenix eBook Collection
Hamel, G. (2013). Chron Small Business: What is the Importance of Surplus? Retrieved from http://smallbusiness.chron.com/importance-surplus-44967.html
Infoplease (2013). Effect on Imports, Exports, and GDP. Retrieved from http://www.infoplease.com/cig/economics/effect-imports-exports-gdp.html
Investopedia (2013) The Basic of Tariffs and Trade Barriers. Retrieved from http://www.investopedia.com/articles/economics/08/tariff-trade-barrier-basics.asp
Tracy Welle
ECO/372
September 7, 2013
Paul Updike
International Trade and Finance Speech The United States is known for its international trade. International trade allows the United States exchange goods and services. International trade plays an important role in the United States economy. A topic to cover is how imports and exports have an effect on businesses and consumers. The speech will cover the effects of international trade to GDP (Gross Domestic Product), domestic markets, and university students. This speech will also cover how government choices in tariffs and quotas affect international relations and trade, what foreign exchange rates are and how to determine it, and why goods from China are not restricted and why the United States do not minimize amount of imports from other countries.
Surplus of Imports Brought into the United States …show more content…
A surplus occurs when the United States have more imports than exports that leads to a trade deficit.
When there is a surplus of imported goods in the United States, it causes the price or that product to fall. According to “Amadeo” (2013), “Automotive is a category where the United States ran a trade deficit in 2012. It imported $298 billion worth of cars, trucks and auto parts, while only exporting $146 billion, running a deficit of $152 billion” (Consumer Products and Autos Contribute to the Deficit). A company that has a high amount of surplus means the company is making money allowing it to invest the surplus in new services, employees and other needs the company have (Hamel, 2013). A surplus can cause businesses to increase prices causing consumers with a less surplus to not buy its products. Surplus can cause businesses to increase or decrease product prices that affect consumers’ ability to make a
purchase.
Effects of International Trade to GDP, Domestic Markets and University Students The United States depends on international trade, export and import of goods and services. According to “Infoplease” (2013), “Nations want their GDP to be higher rather than lower, so nations want their net exports to be positive” (para. 1). International trade has played an important role in the United States economy. If the United States exports are positive, the GDP will increase and if the exports are negative, the GDP will decrease. International trade can affect a domestic market. If a domestic market has a product and another company has the same product made in another country that company can have a lower price than the domestic market. A domestic market can struggle if it cannot compete with imported products. International trades also affect university students because with more imports occurring there could be fewer positions available. As the United States imports more than it exports, this creates more jobs in other countries as demand of products increase. GDP, domestic market, and university students are affected by international trade because the United States chooses to make purchases in other countries.
Tariffs and Quotas “Tariffs are taxes governments place on internationally traded goods and quotas are quantity limits placed on imports” (Colander, 2010, p. 458). The government can see a high in revenue from tariffs. So, the government can choose to raise or lower tariffs with other countries. According to “Investopedia” (2013), “International trade increases the number of goods that domestic consumers can choose from, decreases the cost of those goods through increased competition, and allows domestic industries to ship their products abroad” (para. 1). A government may charge a tariff if it believes the product imported could be a threat to consumers (Investopedia, 2013). A foreign country’s government can also do the same with imported products from another country. Quota limits products to import. For example, the United States sale 20,000 of engines each year, but the government decides to only sale 10,000 this year. The United States gets an import quota for 10,000, the government has to tell other importers that they will not be accepting their products that could result in problems with the international relation between countries.
Foreign Exchange Rates “Exchange rate is the rate at which one country’s currency can be traded or another country’s currency. The exchange rate is determined in what is called the forex market (foreign exchange market)” (Colander, 2010, p. 480). For example, if one in the United States wants to purchase a good for 150 euros, he/she needs to purchase 150 euros. If the exchange rate is $1.20 for one euro, he or she will pay $180 in U.S. dollars to get 150 euros (Colander, 2010). “To demand one currency, one must supply another currency” (Colander, 2010, p. 481). When the demand rises and the supply falls the exchange rate appreciates, but when the demand falls and supply rises the exchange rate depreciates. If a foreign country does not want to buy goods from the United States, the demand for US dollars will fall in the forex market causing dollars to depreciate.
The Unites States Restricting Goods from China Restricting goods from China can be an advantage and disadvantage of the United States as well as China. According to “Alden” (2012), “If the United States restricts Chinese imports, China will respond by restricting imports of U.S. goods, in turn leading to further U.S. restrictions and so on and so on until trade between two countries plummet” (para. 3). If the United States restricted goods from China, it will create more jobs in the United States causing prices to rise. It will be an advantage for creating jobs but a disadvantage for raising prices. People will struggle to make a purchase and will also increase the need of government assistance. With China importing goods to the United States, the demand of products increases whereas if the United States restricted goods from China demand of products would decrease. This will affect consumers, businesses, and the economy.
Minimize Imports from Other Countries As the United States depends on international trade for goods and service, it could cost more to make those products in the United States. If the United States minimized imports from other countries, prices will skyrocket causing people to struggle even more. The United States will compete with its self to survive. If imports stopped happening, the cost of regulations of manufacturers will be expensive therefore, it probably would be better to import goods. If the United States minimizes imports from other countries, those countries will either minimize or stop accepting imports from the United States. The United States is a home of freedom, minimizing or stopping imports will take away the freedom of choice from people. Instead of the freedom of choice people will have to buy products made in the United States (not that it is a bad thing) that is more expensive than what a made in China product would cost.
Conclusion
International trade is important in the United States, because most products are from other countries. Surpluses can cause a trade deficit when the United States imports exceed exports. A surplus of cars, for example can cause a business not to make money if they have to reduce the price to make it sell. International trade has effects on the GDP as it can increase it, domestic markets can find it hard to compete with imported products, and international trade can cause university students to have a hard time finding employment. International trade helps the United States offer low prices to its consumers, helps businesses make money, and has helped economic growth. To eliminate or minimize imports, it can cause problems between countries and their economy. International trade has its advantages and disadvantages of the United States.
References
Alden, E. (2011). The Diplomat: A U.S.-China “Trade War”: Time to Abolish a Silly Notion Retrieved from http://thediplomat.com/pacific-money/2012/10/31/a-u-s-china-trade-war-time- to-abolish-a-silly-notion/
Amadeo, K. (2013). About.com: The U.S. Trade Deficit. Retrieved from http://useconomy.about.com/od/tradepolicy/p/Trade_Deficit.htm
Colander, D. C. (2010). Macroeconomics (8th ed.). Boston, MA: McGraw-Hill/Irwin. Retrieved from University of Phoenix eBook Collection
Hamel, G. (2013). Chron Small Business: What is the Importance of Surplus? Retrieved from http://smallbusiness.chron.com/importance-surplus-44967.html
Infoplease (2013). Effect on Imports, Exports, and GDP. Retrieved from http://www.infoplease.com/cig/economics/effect-imports-exports-gdp.html
Investopedia (2013) The Basic of Tariffs and Trade Barriers. Retrieved from http://www.investopedia.com/articles/economics/08/tariff-trade-barrier-basics.asp