If you enter a supermarket and purchase South African wine, Brazil an coffee, or anything else from another country, then you are experiencing the impact of international trade. Global trade allows countries to expand their market and it is totally based on the import and export of each including nation. As a result, the market is more competitive, and brings cheaper products to the consumer.

Understanding International Trade

Each nation has its own production and natural resources that can be traded or consumed by other nations. Global trade plays a key role in the global economy. For example, if labour costs increase, then the manufacturing cost of an American watch increases, and this would result in an increased price of the watch that an American consumer might purchase from the local mall.

Imports and Exports

A product that is bought from the global market is known as an import, and the product that is sold in the global market is known as an export. Global trade allows countries to use their resources, like capital, labour, technology etc. This helps many countries to produce the same good more effectively at a lower cost. In some cases, if a country cannot produce an item, then it can obtain it from another country.

Some Global Trade Trends Impacting US Imports and Exports

Of course, the pandemic has greatly affected the import and export of products.

1) Localization

Localization is the trending topic due to COVID-19 as there has been trade and travel restrictions. There is a growing in nationalism in many countries to “buy local” and keep supply chains local.

This trend continues with restrictions on travel, resources and suppliers. This affects imports and exports in almost every country. Nowadays the global trend has become much more regional than before.

2) US Increases Enforcement on Forced Labour

Embedded in the numerous enterprises discussed so far is increased attention to, and enforcement of, various human rights violations, especially forced labour in such countries as China and North Korea.

The XUAR (Xinjiang Uyghur Autonomous Regions) bill shows that forced labour was not used in manufacturing, parts, material and products they are importing and also in exporting, It is completely against the law.

3) Market Diversification

While some believe that localization has its advantages, others argue that market diversity is the greatest strategy for success in 2021. “Exporters tend to perform better than non-exporters for several reasons” says Beiling Yan, Senior Research Economist at Export Development Canada. “They specialize their production and enjoy economies of scale; they interact with, and learn from, foreign consumers and suppliers; and they face stronger competitive pressure, prompting them to make investments and improve their business practices.”

4) Increased Cross-industry Collaboration

During the last several months, there have been numerous creative cross-industry alliances and partnerships between firms all over the world. In other situations, corporations have shifted gears and partnered across industries during COVID-19 to deliver critical items to customers. For example, LVMH moved their perfume production for Christian Dior, Guerlain, and Givenchy to hand sanitizer manufacturing. In collaboration with French health authorities, this sanitizer was made available for free to assist prevent the spread of COVID-19.

5) Agility

Companies have to think outside the box and rethink their client bases and consumer wants, since the pandemic has impacted commodity demand dramatically, whether it’s for online learning, masks, sanitizer, or anything else.

Why do companies Export and Import

Companies export and import because it is the simplest method to join in global commerce, it is a less expensive investment than other entrance strategies, and it is far easier to quit exporting than it is to exit the other entry modes. This procedure can be aided by an export and import partner, such as a distributor or an export management business.