International trade is crucial because its effects on me provide a wide range of varieties of a common good. For instance, due to global trade, I can select the type of phone I will use, whether android or iPhone. International trade affects the choice of the commodity to consume. International trade affects commodities prices. For instance, when we compare the price of some local items with that of some imported ones, we find it to be different.
International trade lowers the prices of some commodities that are easy to produce externally. Most of the products I use are from China and Italy. Food, crude oil, and other petroleum products are the most exported by America, whereas pharmaceutical products and clothes are their common imports.
Countries experiencing low production costs for specific commodities avail them in international markets where the cost is relatively high. For instance, locally manufactured clothes in the example above are more expensive than those imported. Comparative advantage is good for countries because it reduces production costs for some commodities.
A tariff is a tax the government imposes on imports, also known as a duty. The government charges it for several reasons: to gain revenues from the proceeds, control the supply of substances, protect local industries from failing, and initiate negotiations between trading countries. The consumer feels the tax pressure when the prices rise but when the prices remain constant on the seller. The government enjoys the tax because it receives revenue and uses the proceeds to finance infrastructural development.
American consumers receive protection from counterfeit commodities, and American workers retain their jobs that they may lose due to foreign surviving markets. However, the tariffs impact the industry in negative ways as well. Consumers pay high prices when the price rises, while the sellers gain low profits when the costs remain at par. The taxes initiate trade wars between the participating governments and discourage foreign workers from accessing external markets.
Culture is people’s way of life and accounts for their behavior and attitude toward specific objects. In business, culture determines what society consumes or does not consume. It, therefore, affects the distribution of commodities in society and directs what is consumable or not. Education is essential because it explains the importance of appreciating different cultures.
Education helps eliminate illiteracy and corrects the misguided decisions of society, thus promoting the consumption of some foreign products. Both culture and education affect international trade as the consumption beliefs of one community differ from the consumption of the other. Another way to increase the American understanding and acceptance of foreign cultures is by promoting the global citizenship of members. People get to know different cultures and beliefs and conform to similar patterns.