Globalization : A New Way For International Trade

Globalization is the process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. Globalization is simply the interactions of different countries throughout the world. International Trade as previously defined is the exchange of capital, goods, and services across international borders or territories, which could involve the activities of the government and individual. International Trade and Globalization go hand in hand. Both of these two are usually very beneficial to businesses such as

Whenever a foreign item is bought, an American loses his job. As more people migrate to America, they start their own businesses. These businesses may produce the same products made in America. To prevent Americans from losing their jobs, tax will be given to the new companies. Even though prices may be even or not, it is most likely that now, since the foreign products’ price has went up, the original American product will get the most sales since it is better known. “Tariffs increase the prices of imported goods. Because of this, domestic producers are not forced to reduce their prices from increased competition, and domestic consumers are left paying higher prices as a result. Tariffs also reduce efficiencies by allowing companies that would

However, the United States does have some industries which do not perform at the capacity of those in other countries. These inefficient industries could be helped to stand on their own legs if their foreign competition was to be restricted by tariffs. If the East Asian auto industry is flooding the market with cars that sell better than their American-made counterparts, the government can intervene in the name of domestic businesses and jobs by placing tariffs on them. On the flip side, the consumer has to pay more for imported Japanese and Korean cars. [3]

Globalization to me is when countries around the world expand their economic and financial dealings, communications, and political and cultural views with other developed and developing nations, with the hope of expanding worldwide economic growth and lessening poverty. International trade is a means of accomplishing this end.

The foreign producers have a positive effect on the American economy and American consumers benefit from the international trade. The trade barriers restrict free trade, which in turn affects the realization of gains from specialization and economics of scale negatively but they have to be enforced in certain circumstances in order to safe guard the national interests.

Have you ever stopped to wonder how the countries in the world interact with one another? Globalization is one way. Globalization, in my opinion, is the process in which people, goods, and ideas are spread throughout the world. This economic trend is the reason that someone can go to a Nike store in the United States as well as in England or even China. Globalization has costs and benefits, or negative and positive aspects, for every country. In my opinion, globalization's benefits outweigh its costs, and overall is a good thing to happen to our world.

Globalization is the process in which people, ideas, and goods spread throughout the world, spurring more interaction and integration between world cultures,

According to Essentials of Economics, a tariff is a form of excise tax, one that is levied only on sales of imported goods (Krugman, Wells, and Graddy 538). Tariffs are generally imposed for two purposes, to protect domestic industries and as a source of revenue (Tariff). The effect of a tariff on a small or a large country would be higher domestic prices because the cost of the tariff is passed on to the consumer (The Basic Analysis of a Tariff). Consumers would be deterred from buying that particular import because of the cost factor. It would also cause there to be a surplus of that import. A high tariff on imports would have the effect of switching from imported goods to goods produced domestically;

Globalization is the process of the world becoming better communicated, which promotes the adoption of common cultural aspects, the international exchange of goods and services, and foreign investments, thus creating a global market and encouraging division of labor.

The price floor takes a part of the consumer surplus and reassigns that amount of money to the producer surplus and creates an inefficiency: the deadweight lost Meanwhile, the tariff presents more complicated problem: trade off among increased producer surplus for the foreign companies, decreased consumer surplus, and deadweight loss. To minimize the negative impact of the deadweight lost, not to arouse the public too much, and not benefitting the foreign producers too much, the government should not install a big tariff and a high price floor right away. Rather, it should slowly increase the floor and the tariff over periods of time. One way or another, should the government activates these two policies, the consumers will not happy due to less profits they will

Economic policy of nations and states, tariffs are tools used to control the flow of goods, services and resources being brought into the country. The overall purpose is to create security for the domestic industry from the imported product. These products can sometimes be less expensive to purchase than the goods being manufactured in the local economy. (McEachern, 2015) The government does this either stimulate or deflate trade with other countries. (Fontinelle, 2012)

Globalization builds good relationship between countries as they exchange products. Trade agreements like NAFTA, WTO, EU and ASEAN etc. are done to make the tie stronger and for the ease of trading with each other. It helps to avoid conflicts among countries, promotes understanding and goodwill.

“The Greening of Trade Wars” Forbes, 183(8), 26. Retrieved May 10, 2009, Forbes.com.) Although many believe that protectionism may indeed afford some advantages for domestic business, opponents of protectionism argue that due to the interdependence of global trade and financial systems, these advantages are offset by many negative consequences (William A. Kerr. (2009). “Recession, International Trade and the Fallacies of Composition.” The Estey Centre Journal of International Law and Trade Policy: Special Section on Geographical Indicators, 10(1), 1–11). For instance, an unintended—and unavoidable—consequence of subsidies and tariffs is higher prices for products available to consumers. Protectionist policies also tend to lower the overall quality of goods available and ultimately increase the tax burden on the general public. Writing in the “No” selection for this debate topic, Professor of Economics at California State University Robert Krol describes the findings of various economic studies of international trade. He looks at the effect of trade on employment and wages as well as examining the costs of trade restrictions. From his research, he concludes that “Although international trade forces significant adjustments in an economy, as the evidence shows, the costs of international trade restrictions on the economy outweigh the limited benefits these restrictions bring to import-competing industries.” (p. 10) The opposing view, taken from Prospect Magazine, is

Sometimes goods might be sold overseas at prices that are below their production cost and below market price in the domestic market. Cassimatis (2007) argues that, through international price discrimination, import competing industries might be forced to exit the market. Ideally, it is costly to re-establish industries after they have been forced to close down. Although not common in modern times, governments might be justified to effectively set prices of goods that are not domestically produced (imported goods) (Cassimatis 2007). These measures would prevent dumping: the process of exporting goods by a country to another country

Governments intervene in international trade through use of tariffs that are levied on both imports and exports. The government may either impose fixed tariffs that are calculated per unit of the import commodity or the ad valorem tariff that is calculated as a fixed percentage of the monetary value of the imported commodity. The government imposes high import tariffs in order to control the rate of imports by making the imports more expensive in comparison to the domestically produced substitutes. The tariffs increase the prices of goods and services thus reducing the quantity demanded (Misra and Yadav 2009). The use of tariffs is detrimental to international trade since it lowers competition and results in high prices of commodities in the markets. The tariffs discourage imports and domestic producers benefit from the higher prices and reduction in competition. The EU uses variable