* International Trade and Finance Speech * Good afternoon ladies and gentlemen, fellow congressmen and women, and my fellow constituents. I would like to convey my pleasure at my new post as Speaker of the United States House of Representatives or commonly known as Speaker of the House. * As I step into office I would like to address the current state of the U.S. macroeconomy. The United States is not an island nor is any country that does international business. The United States (U.S.) operates as an import and export country. When the U.S. has an excess or surplus of resources, these resources are sold on the open market to other countries as an export. When the U.S. has a shortage of resources, they are purchased on the open market from other countries as imports. * These imports and exports in the U.S. are exchanged with American dollars. The value of the dollar will affect the value of the funds exchanged for these import and exports are affected in equal measures. When the value of the dollar is low, American buying power is less. When the value of the dollar is high, American’s are able to purchase more than they were previously able to. * I have explained that when the U.S. has an excess of resources, they are sold outside the U.S. to other countries. The question then arises, what happens when there is a surplus of imports. What happens when a U.S. business purchases too much of a foreign resource? They now have too much of a resources that they paid shipping to bring it to the U.S and now needs to store it at an extra expense until it can be sold or disposed of. Let’s use automobiles as an example. I like the Toyota Tacoma truck because I am from Tacoma, WA so I will use this truck as my example. So the question is, what happens when a company purchases too many Toyota Tacoma’s to sell within the expected amount of time. The company needs to store these trucks until they are sold. They also need to provide insurance in case they are stolen or damaged. The dilemma is that as these costs continue to grow on top of the original purchase of the truck, the company will not make as much of a profit or might take a loss. In addition to these concerns, the company could have been selling another model of vehicle that might have been in higher demand if they had the room to store them. If the company cuts its losses and sells the truck at an extreme discount to make room for new inventory, it is a loss for the company but it is great savings for anyone that purchases the truck. * Now let’s look beyond just Toyota Tacoma trucks and look at all international trade that comes into the U.S. compared to the U.S. gross domestic product (GDP) which is all final goods and services produced in the U.S. in a years’ time (Colander, 2010, p. 183). If the U.S. exports more than it imports, it is a positive GDP and could cause inflation. If the U.S imports more than it exports, this is a negative GDP and if this happens in consecutive quarters, this can led to a recession or worse still, a depression (INVESTOPEDIA, 2013) . * If we look at the domestic markets specifically, an increase in GDP reflects a higher demand in goods or services and this would lead to an increase in employment. A decrease in GDP results in a decrease in employment. * What all this means for university students is that the job market is constantly fluctuating and they need to react to that fluctuation and make sure their curriculum matches what the current employment economy needs. * When goods are shipped into the U.S., there is a tariff that is applied. A tariff is an excise tax that is applied to a specific good. If the government wants to encourage
