International Trade and Finance Speech
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International Trade and Finance Speech
Introduction
Hello ladies and gentlemen, today I will explain some important factors about the United States economy. I will also discuss surplus, international trade, tariffs, quotas, foreign exchange rates, and why it is not wise for the U.S. to restrict imports. The main focus of this speech is to inform you about international trade and how it influences our exchange rate and economy.
Surplus
A trade surplus is when imports value is less than the value of the exports (Amadeo, 2014). Generally countries perceive a trade surplus to be positive because it generates a profit. More revenue will provide a better quality of life for the residents for that country. A surplus of imports can be good for consumers but they can be bad for local businesses. Local companies may have to reduce prices so they can compete with foreign companies. Increased import surplus can cause people to lose their jobs and cause skillsets to be lost. Places like Germany, China, and Japan import products to the U.S. Automotive are imported to the U.S. frequently and are imported more than exported. This causes a trade deficit and can cause the U.S. to lose its competitive edge if it happens for a long period of time (Amadeo, 2014).
International Trade and GDP
International trade can have a positive impact on the economy. Exports and imports of goods and services may enhance our way of living. The GDP is how many goods and services an economy is producing at a given time. Things such as consumer spending, investments, and government spending are affected by imports and exports. Depending on which way the trade goes it can affect the domestic market if consumers are not spending and university student can be effected because things such as grants or any other government assistance may be affected as well. More exports and less imports add to the GDP and lower exports and higher imports contract the GDP (Mcteer, 2014).
Tariffs and Quotas
A tariff is tax on imports that are charged to business for the imported goods (International Business and Trade, 2014). This tax may raise the prices on goods for consumers. A quota is the maximum allowance of a certain good or service that may be imported (International Business and Trade, 2014). The quota restricts the availability of a product which can be a good thing for domestic goods. Tariffs increase revenue and quotas create surplus for license holders (International Business and Trade, 2014). Lowering tariffs can promote international trade and imposing quotas and excessive taxes will discourage imports. The government uses tariffs and quotas to control international trade.
Foreign Exchange Rate
The foreign exchange rate is the price of money from another country. For example, I live in Japan and currently the exchange