International Trade and Finance

International Trade and Finance Speech

This speech delivered by the Speaker of the House to a group of reporters surrounding the topics of international trade, foreign exchange rates, import surplus and how they each impact different constituencies. It will also explain why the government would not be able to restrict importation of goods from China, or if wanted to impose tariffs.

The Economy and international Trade

The United States was once the highest exporter in all the world. Today, the United States has a negative balance of trade, because of the fact that we now import more goods than we export goods. An example of an import would be oil. The oil that we have imported impacts our businesses and our consumers by making gasoline and other oil derivatives more expensive. This makes prices increase because consumers will have to pay for goods from the fact that the cost of driving will go up. This is a major reason why the government is trying to encourage the development of alternate forms of energy such as coal or natural gas.

The goods that the United States imports are not always negative. American consumers have benefited greatly from the imports such as electronics or apparel that is made mostly in Asia. The cost of production for these goods are lower in China and most other Asian countries, making it much cheaper for Americans to buy these types of goods that are being manufactured overseas.

The reality of international trade is that production will naturally shift to places where goods can be manufactured more efficiently and at a lower price. What the United States has to focus on is developing new technologies and products of higher quality. With a focus based on innovation and quality instead of labor costs.

International trade has an impact on the country's GDP, the financial markets, and importantly university students. The GDP of the United States becomes stronger when we export goods more than we import goods. If negative trade balances become consistent it can lead to deficits, which will in turn cause the government to borrow more. If the government borrows more this will have an impact on the financial markets which could in time make it more costly for the United States to cover all its deficits. We need to promote our exports in order to help the GDP and make our country more impressive to investors. A healthier economy will create enough employment for those needed, especially university graduates that will be trained for the field.

The quotas and tariffs regarding the government's choices has a direct impact on our trade and the relations that we have with other countries. Reducing tariffs and participating in free trade agreements helps our export businesses. This is a reason why our government has in the past worked for establishing trade