International Trade

International trade is commerce involving two or more countries, whether they are trading in goods and services alone or are trading with each other in their respective currencies. International trade is normally the exchange of particular products, capital, and transactions across international frontier or territories since there typically is a surplus or a deficit of goods and services between the two countries involved. There are many different kinds of businesses that make and conduct international trade including, importers, exporters, manufacturers, traders, and exporters. The most important players in international trade are the importers, exporters, manufacturers, and traders who facilitate the movement of goods and currencies between countries.

international trade

Many protectionist policies have been put into place to protect domestic industries from international competition, limit imports, and raise tariffs or other taxes against specific goods. The protectionist tendencies of countries in international trade often lead to a reduction in exports, employment levels falling in the importing countries, and an increase in imported goods that are subject to tariffs or restrictions. The protectionist tendencies of some countries in international trade often lead to a reduction in the level of growth in national income and a shift of population from the developing to the developed countries. Some protectionist tendencies can also lead to a shift towards outsourcing where production of many domestic products is outsourced to lower-cost locations, thereby reducing employment in the country where production is located.

One way to decrease imports and increase exports is to reduce the barriers to entry for goods imported into the country. For instance, it would be desirable if each country could have completely open access to the worldwide markets without any restrictions on entering those markets. However, this is not always possible due to political constraints and the relative strength of some countries compared to others. A common practice that can be used to open up restrictive barriers to imports is through protectionist legislation. Protectionist legislation can also be used to reduce imports by lowering the duty on some imports and increasing subsidies on others.

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