International Trade Simulation and Report Persuasive Essay Example

accused of currency manipulation and found guilty, the Obama administration chose not to confront them on the matter.

R. Glenn Hubbard and O’Brien (2010) state that China’s illegal export subsidies through the undervaluation of its currency by 30 percent or more distort trade gains, create barriers to fair and free trade, and harm US industries while causing the loss of millions of American jobs. Therefore, quota restrictions should be imposed on all Chinese imports until the country stops this anti-dumping behavior. A quota represents a maximum limit for the quantity of goods that can be imported.

According to Hubbard and O'Brien (2010, p. 1013), it appears highly unlikely that significant action will be taken due to China's substantial creditor status with the U.S.

Miller (n. d.) illustrates an example of trade restrictions through Cuba's trade barrier. The author explains that if a country imposes trade barriers against another country's products, the affected country is likely to retaliate by imposing similar measures on the former.

As stated in paragraph 11 of "Trade Wars: Both Sides Lose," trade wars have negative impacts on all involved and can damage the economy. Nevertheless, limitations on trade may be required for equitable competition with countries such as China. The trading of products and services in worldwide commerce is essential as it plays a crucial part in economies that are open to these transactions.

If one nation or entity outperforms another in producing a specific good or service with the same resources, they have an absolute advantage. Conversely, having a comparative advantage suggests that they can make a product or provide a service at a lower cost than their rival. It is essential to gain

a comparative advantage in trade as it leads to higher profits for individuals or countries. This way, they can import other products that are not made as efficiently or profitably.

Both individuals and countries require sound business practices, such as trading for goods, to attain profitability. The exchange rate reflects the supply and demand of currency when businesses purchase foreign items and convert it to the local one.

The currency value of a country can be affected by international trade. If there is a high demand for products from one country, like the United States, it may cause an increase in the demand for another country's currency, such as China's, resulting in its value rising and lowering the other country's currency value. This process requires the purchasing nation to exchange their currency for bank notes of another nation. Moreover, if a country lacks economic resilience, other nations may not invest in their securities which could lead to depreciation of their currency. Despite these effects, international trade offers benefits through imports that enable access to new goods and cultural experiences.

While free trade can lead to reduced product costs, it may also cause a reduction in quality. The United States has witnessed this phenomenon as China and India have surpassed them.

One reason why production costs are lower in Asia and Europe is due to lower wages for employees, which helps reduce labor costs, unlike in the U.S.

The debate between free trade and trade restrictions is exemplified in Rodamia, where higher wage requirements in the US and Europe result in increased labor costs. In contrast, countries such as India and China offer fewer benefits to their workers, enabling them to

gain higher profits from production.

While free trade is generally favored for overall welfare, certain situations may call for trade restrictions to protect developing domestic industries or prevent dumping. Nevertheless, bilateral or multilateral trade agreements that reduce barriers between countries usually bring mutual benefits. The World Trade Organization (WTO) and similar organizations aim to foster international trade growth and will remain crucial in ongoing efforts to develop global commerce. Ultimately, simulations of international trade provide greater insights into the trading process.

Although the approach to attaining goals in global commerce may differ based on specific situations, most nations have comparable aims. It's prevalent for countries to possess distinctive strengths that must be optimized, and having an understanding of the limitations and benefits of trade partners is essential in developing a victorious international trade plan.