International Trade Speech
International Trade SpeechBlake WinterbowerSydni KirbyDeb Stone Michelle AmosKim SinclairErica RassmannECO/372March 16, 2015Kalamogo CoulibalyInternational Trade SpeechSurplusWhen a surplus of items or products is created, the price of those items drops. In some instances these products may be sold at a loss, simply to get rid of them. In most cases the owner of the products is paying storage for the surplus to sit, which costs more money. Selling the products makes room for others to be brought in. During 2009, the U.S. hit a recession causing an oversupply of cars, houses and cows. Because of the surplus of dairy cows, there was an increased supply of milk, which caused the prices of raw milk to go from $20 per 100lbs to $14. The bags of milk powder, being shipped to countries, such as, Mexico, Egypt and Indonesia, have stalled due to the economic slowdown, creating a surplus of milk and it’s by products. This surplus is especially dangerous, because unlike any other product, milk production cannot simply halt until the economy recovers. The cows still have to be fed and milked on a regular basis. An idea to help cut the supply of milk was for farmers to sell some dairy cows for hamburger, however, these farmers are not willing to risk their livelihood by getting rid of cows, which will produce income when the economy returns to normal.
Effects of international trade to GDP, domestic markets and university studentsThe effects of international trade to the GDP can be either negative or positive. If imports are exceeding exports then the GDP will be lower. When the U.S. is exporting more than it is importing then the GDP will be higher. Exports create income in the U.S. and increase our GDP, imports create income in the country they come from and lower our GDP. When there is a demand for our products overseas than our domestic market will flourish, but when our domestic markets are competing with imported products we will see our domestic market struggling. For the consumer, competition between foreign and local markets can give us lower costs but, lower prices can also hurt local markets because the cost of producing a product is generally higher in the U.S.Effects of international trade to university students has been seen as a positive impact. According to Siegmund (n.d.), “U.S. receipts from international students studying in the United States reached $17.8 billion in 2008, the highest amount yet recorded. Those U.S. exports come primarily from travel by international students, who then pay tuition, fees, and living expenses to U.S. institutions” (para. 1). The U.S. has been able to get a large market share of international students who travel to other countries to study. These students not only pay tuition, fees and living expenses but many also have the opportunity to travel around the country and they spend their money which helps improve our GDP.