International Trade & Finance

International Trade and Finance Speech

The U.S. economy relies on many aspects in order to remain balanced and healthy. Two large aspects are foreign trade and foreign exchange rates. The entire economy can be thrown off if either of these has a dramatic sudden change.

When too much of a good is imported, it is considered a surplus. When too little is imported, it is considered a deficit (Colander, p. 581, 2010). In the event of a surplus of imports, the price would drop. Depending on how long there was a surplus of the good, it would affect the price of the good. An example of an import deficit, meaning we import more than we export, is seafood. In 2011, the U.S. imported $16.6 billion in seafood products but only exported $5.13 billion, a noticeable difference. ("Imports And Exports Of Fishery Products", 2011). Most seafood product prices are fairly low as we continue to have a trade deficit.

International trade has an impact on Gross Domestic Product (GDP). The more the U.S. manufactures and exports, the more income we generate. This increases the GDP. However, by importing as much as we do, the GDP is decreased due to income generation abroad. International trade also affects domestic markets. It can be good or bad. If, for example, a local market is exporting goods, it generates income for that business to spend in the economy and strengthen it. On the other hand, if a product is cheaper to import, the domestic product won’t be needed and will no longer produce income, weakening the local economy. Domestic markets also are affected by the value of the U.S. dollar. The more the dollar is worth, the more money that particular market is making and vice versa.

University students also may be affected by the trade deficit. If exports were to decrease, that would lower the GDP. A lower GDP means higher unemployment levels. That would increase job demand and reduce supply. This would make getting a job after graduation much harder and make it difficult for...