International Trade and Finance

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Linda Luc Duong
International Trade and Finance
ECO/372
August 27, 2012
Matthew J. Angner

International Trade and Finance
When there is a surplus of imports brought into the United States it means that the price of the products will drop. Companies in the United States are competing with the Chinese made products will suffer from price drops on goods. Lower prices on goods will benefit consumers. Large screen Liquid Crystal Display (LCD) and High Definition Television (HDTV) is a good example. Because of the recession there has been a surplus of large screen LCD and HDTV. Not many people can afford or buy them with the high prices. Large screen LCD/HDTV is much cheaper than what it was four years ago. The effect of international trade on GDP is that GDP and employment goes hand in hand. What this mean is that as employment move out of the United States it create smaller GDP in return. Imports of goods also mean lower prices for goods. It makes it harder for the United States based companies to compete against the imported goods with lower price and cost. The domestic market will hurt from the imported goods. Not many companies will stay in the United States to make their products. To be more competitive and cut cost many companies will move out of the United States to get cheaper labor and cut cost. Apple Inc. is one such company. The highly popular Ipads are made in China. The United States government chooses tariffs and quotas in the way of international relations and trade is made. China and the United States have good international relationship concerning imported goods. China is more favorable with tariffs and quota as oppose to say Vietnam. With lower tariffs there are more imported goods made from China coming into the United States economy. Most of the goods in the United States economy are “Made in China.” A price of a computer laptop today is much lower than it was four years ago. Technologies have advance so much that it drives the prices of...
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