'International Trade and Finance Speech\r'

'Economics Paper 5 institutionwide apportion and Finance chuck up the spongey Financial Pitf onlys 2 Ladies and Gentlemen of the House, good afternoon to you wholly. I would akin to thank you for the fortune to speak to you this today on such(prenominal) an championshipant topic †our economy. Our economy is in crises mode. To say that our economy has slowed down would be an under narratement. The economy, to date, has prefern a step rearwards and the direction we atomic number 18 heading for lose take us from a go in long- starting recession to an all-out pecuniary depression. Ameri tin cans consume far more(prenominal) goods than we station on a monthly basis.What that means, manifestly put, is that we go forward to build more debt and get poorer with every passing month. Think of it like this †the norm person goes with a certain bar of managed stress distri unlessively day. When outside stress, or variables atomic number 18 added to casual stres s it places more pressure on the tree trunk and mind. If this outside stress isn’t dealt with or managed, and as more is added, the body go away any explode or shut down. Our economy is like the average person’s body. Most of us do non understand the catamenia stintingal state of affairs.Not that we wouldn’t be able to comprehend the status, simply al vertical about ar unaw atomic number 18, as the media and study policy-making heads argon sheltering the Statesns from the truth and non plunk in to the true issues at hand. We before long live a bargon of significanceees in our great nation. This should be of no surprise to us †countries that we before long h grizzly the largest come in of deficit through imports are: • chinaware •Mexico •Japan Financial Pitfalls 3 With the Chinese enjoying a spike in merchandise capital oer nearly foreg unrivalled ten old age, they take hold become a giant on the planetary econ omical scene.On a closer level, one that strikes the watch of every American man and woman, the bear upon of this inordinatenessage is be felt in our automotive industry †the true spikelet of this great unsophisticated. chinaware has grown into an auto-parts fiend as they contribute incrementd over 900 percent in exports since the beginning of the century. How are they doing this? By producing quality parts at a cheaper rate is nothing sensitive but the Chinese are universe criticized by legion(predicate) for benefitting from illegal bullion manipulation which leads to unfair pile policies.These policies pose a real threat to American automotive jobs in the near future. International look at has a significant return on the Gross municipal Product. The gross national crossroad is the true commercialize worth of officially recognized goods or service scored in a acres. Think about this for a moment †if you were to go into a segment store and found dickens shirts that were superposable in color, material and stitch but one was priced ten bucks in high spiritser(prenominal) than the separate. Which one would you choose? Easily you would pick the cheaper production and that is the issue American consumer’s slip each day.Larger corporations have the ability to fabricate products and pay their workers far less than those present in the states. They do this crossways the chunk in what is called slave labor. As a result, there are fewer jobs ready(prenominal) in the joined States, more across the globe, and more goods being merchandise into the orbit and a more dramatic kernel on our economy. Financial Pitfalls 4 We have exhausted our means to generate additional income for our nation through dutys and sanctions on goods being brought into the expanse.The taxes levied on goods and the doctors placed on first appearance products and goods can pertain and possibly blockade multinationalistic championship . This may also increase outturn constitutes and the possibly have an effect on the external supercede market. Exchange evaluate are compulsive for the most part by the amount of currency bought and sold either through speculation or planetary asset transactions in either services or goods. in that respect are dickens types of substitution rates: short-run and long-term. The short-term sousersify rates swing from delicate to minute and are groundsd through changes in provision and demand for cash as it is being sold from one country to an otherwise(prenominal).Long-term rates are more straightaway professed through national monetary policies created by global presidential terms. This has a global effect on economics. With our menses national election trail heating up and the nation’s economic state of affairs in the center of discussion, there give be promises made by each candidate. The focus result not only be today’s economy but how we will go forward out of the red and bandaging into the black. There are some(prenominal) ideas but in my mind it is simple as an old saying †you must spend money to exercise money. For us o make money and become financially independent, recant yet, a global leader in economics, we must learn from our past. Financial Pitfalls 5 As President Bill Clinton discussed in a recent interview with fate Magazine, he l tutelage out the trey keys to bring our economy back †• let out the large amount of capital that is being held but not invested •Accelerate the solvent of the home mortgage crisis •Bring back manu pointuring Sounds easy but it isn’t †this is not a short fix to a growing crisis but will take sentence for us to work unneurotic to climb back to the top.\r\nInternational sight and Finance Speech\r\nInternational craft and Finance Speech ECO372 March 25, 2013 The impact of international trade on the linked States economy is quite signi ficant. era historically the get together States had been a nation that provided recognize to other countries, it is now in a blood line. This decline has caused the unite States to become a study(ip) debtor, owing millions of dollar bills in pertain to other countries. This is a result of an dissipation of merchandise, which has resulted in a senseless of trade goods. This surplus can be requisite to help offset the underway deficits, but may stunt the economic harvest-festival of the United States.When there is a surplus of import goods from immaterial countries, the United States slips into a deficit. This deficit is created from the trade balance. The largest quantity of import goods is the transportation equipment. Between 2006 and 2010, autos were the highest ranked import, followed by energy-related products. This surplus of imported vehicles resulted in the unfitness of American automobile manufacturer to produce comparably priced vehicles. This further resu lted in U. S. automobile manufacturers get hold ofing to either receive government aid in some cases, or institutionalize bankruptcy and close for good.The closing of several(prenominal) automobile manufacturing companies and plants resulted in an increase in the unemployment rate, as displaced workers have been unable to check comparable work. International trade can also have a major impact on the Gross Domestic Products (gross domestic product). It can affect the level at which imports and exports are operating, it can reduce consumer spending, and affect the unemployment rate. A higher rate of exports to imports will increase the GDP, season more importing will have the turnabout effect. These fluctuations in profession have negative and overbearing effects on the U.S. economy. The more the United States exports, the more income it is gaining. This is good for the rate of employment, as the higher demand for U. S. products requires more productivity. work deficits also h ave an impact on consumer spending. When consumer spending is high, trading deficit percentages increase. The opposite is true when consumer spending is low. Domestic import markets also increase as the prise of the American dollar increases. International traffic and trade are affected by tariffs and quotas implemented by theUnited States government. obligations and quotas allow the U. S. to check off between the domestic supply and the world supply. Due to cherishion from the government, domestic markets need not fear competition from foreign producers who provide higher quality, disdain apostrophize products. However, too many restrictions on imports could cause a decline in creative trade with foreign countries. These other countries could install tariffs on U. S. goods which would result in the United States having to pay higher prices for imports.In addition ot all of this, international trading relationships remain unaffected, as free trade agreements allow countries to procure and sell goods at fair market value. Another factor in international trade are foreign deputise rates. conflicting counterchange rates are the rate one country’s currency may be exchange for the currency of another country. It is an economic bank note implemented by the government to keep in line equilibrium of trading activities. A decline in the exchange rate hangs a country’s purchasing power. overseas exchange rates are affected by the engross rates levyd by a country for currencies as a result of demand. These interest rates are managed by the central banks of each country, in the United States this would be the Federal Reserve, or the FED. Exchange rates are headstrong by several factors, interest rates, productivity, ostentation and debt are all factors in find the exchange rate of any accustomed country. Since the 1970’s, when president Nixon took steps to fully harden relations between the United States and china, mainland main land China has become one of the major import countries for the United States.While it would seem that the United States could impose many restrictions on trade with China, many would argue that it would be very unwise. A restriction on imports from China could be very detrimental to the United States economy. advanced restrictions would not only prompt monetary action from China, such as higher prices, it could also prompt civil actions, perchance even war. Free trade allows countries to utilise in trade without additional tariffs or quotas. If China is not enforce with high tariffs and quotas, the United States government knows that the savings will be passed on to the consumers.Limiting the amount of goods imported from china would also greatly limit the variety of products available to U. S. consumers. This would reduce network and lead to an increase in unemployment. This could continue on the result in an precarious United States economy. In conclusion, international trad e has a major impact on the economy of the United States. historicly the United States has been a major power in international trade and pay. Currently, the U. S. is in a decline which has cause some major debts.An increase in imports, a decrease in the GDP and fluctuations in the exchange rate have led us to being indebted to many countries while we work though the current recession. Resources: Colander, D. C. (2010). Macroeconomics (8th ed. ). Boston, MA: McGraw-Hill/Irwin. McTeer, B. (2008). The Impact of Foreign flip on the Economy. Retrieved from http://www. economix. blogs. nytimes. com U. S. Consumption Spent on Foreign Imported Goods. (2011). Retrieved from http://www. americawakeup. net\r\nInternational slyness and Finance Speech\r\nInternational Trade and Finance Speech ECO/372 International Trade and Finance Speech Macroeconomics consists of the large cuticle economic factors such as interest rates and national productivity. International trade, finance and exchange r ates are a large part of this study. Today, we will dive into the basic definitions and descriptions of simple terms and concepts as they relate to macroeconomics. â€Å"The trade balance is the digression between a country’s exports and imports” (Colander, 2010).When a country is exporting more than they are importing a surplus is created, so there is more production than phthisis. The opposite is true for a trade deficit. A country that imports more than it exports is track in a deficit; consumption is more than production. An practice session of a product in the United States with a surplus is crude vegetable oil. Seven years ago the U. S. imported about two-thirds of their oil consumption. By 2014 it is pass judgment that the U. S. will only import 6 billion barrels of crude oil per day; this is about one-third of what the country uses and by 2020 U. S. il production will exceed Saudi Arabia’s (Phillips, 2010). The hassle is that the oil produced in t he U. S. is high-quality crude and the oil imported is heavy, sour oil. Since the refineries are currently equipped to refine the heavier oil the U. S. has a surplus of the high-quality crude. One would expect lower oil prices with the surplus, but as the current gas prices reflect this is not the case. While the process and the politics involved have many components not discussed here the crux of the situation is that a surplus of an import can cause lineage and domestic consumers to suffer.Gross Domestic Product (GDP) is the value of all goods and services produced in one country during a one year period. GDP is made up of consumption of goods (expected to last three or more years such as food and clothing), services, government expenditures (schools, upkeep of roads, and military expenses), residential and non-residential spending, and business inventories. The equation is all of the items listed less ay imports to other countries. International trade influences the GDP by expa nding markets with imported goods and services that are either not available in the U.S. or are less valuable if imported. approximately of the goods imported are coffee, bananas, oil, and automobiles from Germany and Japan. The imports of these goods increase the economic GDP, but also allow the U. S. to export products to other countries. A result of this economic expansion and diversity of goods and services is free-enterprise(a) pricing and an increase in the market competition among producers providing domestic consumers with less expensive products. A major advantage of trading is the ability of certain producers to concentrate or specialize in certain goods.A discriminate would be the government imposition of restrictions and limitations to protect the domestic production and market. Governments have imposed taxes on trading transactions which increases the cost of importation. Many governments also restrict or limit the import of goods and service to their country. These impositions are known as a tariff or quota. Tariffs are taxes governments place on international traded goods †generally imports (Colander, 2010). They are most commonly used to restrict international trade and promote domestically produced goods.Quotas are put in place for the equal reason but rather than tax imports the quantities of product are limited. Tariffs affect trade patterns, but they also create tax revenue for the government often offsetting the loss of consumer surplus (â€Å"Impact of Trade Tariff Cuts: Long-Series Historical Evidence”, 2013). The exchange rates are â€Å"the price of one country’s currency in terms of another’s currency” (Colander, 2010). To understand the conclusion of an exchange rate one require to judge of currency as just another good (Colander, 2010).Consumers demand other’s countries’ currencies to buy goods and assets in that country. Foreign exchange rates are obdurate by supply and d emand of goods. An example to understand how the demand-supply balance moves is to examine the dollar vs. rupee exchange. The dollar/rupee exchange rate will depend on how the demand-supply balance moves. When the demand for U. S. dollars in India rises and supply does not rise correspondingly, each dollar will cost more rupees to buy.Exchange rates are in a regular state of fluctuation because of the countless activities of the foreign exchange market. China currently supplies the U. S. and many other countries with goods. It would be difficult to discontinue because â€Å"buying from China is in fact buying American” (Chen, 2011). Chen, 2011 reported that America imported $374 billion of goods and services from China in 2010 and exported $115 billion to China. This created a trade deficit of $260 billion. But if calculations are based on alue-added contributions by the two countries, America actually has a trade surplus of $70 billion. One should think about the jobs that are created from the importing of goods from China rather than the jobs it is taking away. Apple employs thousands of associates in America to sell iPhones, Target employees over 350,000 American workers who sell Chinese imports, and thousands of UPS and FedEx workers deliver Dell computers, Hasbro toys, and Nike shoes to American families (Chen, 2011).Thank you for your time and I hope the information provided gives a high level understanding of international trade and finance as it relates to the current state of the U. S. macro economy. References Colander, D. C. (2010). Macroeconomics (8th Ed. ). Retrieved from The University of Phoenix eBook Collection. Phillips, M. (2013). fall U. S. Oil Imports Will Reshape the humanness Crude Market. Retrieved from http://www. businessweek. com/articles/2013-01-16/falling-u-dot-s-dot-oil-imports-will-reshape-the-world-crude-market Impact of Trade Tariff Cuts: Long-Series Historical Evidence. 2013). Retrieved from http://www. globalpolicyjo urnal. com/articles/world-economy-trade-and-finance/impact-trade-tariff-cuts-long-series-historical-evidence Alden, E. (2013). A U. S. -China â€Å"Trade state of war”: Time to Abolish a sappy Notion. Retrieved from http://thediplomat. com/pacific-money/2012/10/31/a-u-s-china-trade-war-time-to-abolish-a-silly-notion/ Chen, B. (2011). Buying From China Is in Fact Buying American. Retrieved from http://www. forbes. com/sites/forbesleadershipforum/2011/12/22/buying-from-china-is-in-fact-buying-american/\r\n'