The term “trade balance” is defined as the sum of a country’s exports less its imports, in aggregate dollar terms.  A negative trade balance is known as a “trade deficit” – i.e. where the value of imports exceeds the value of exports.  Increases in the U.S. trade deficit since the 1970’s can be traced to three primary sources – a long decline in savings as a share of gross domestic product (GDP) that accelerated in the 1980s, fluctuations in the business cycle, and relatively attractive investment opportunities in the United States in the 1990s. At its current pace, America’s trade deficit is expected to top 1 trillion dollars in 2008, with U.S. to China trade expected to balloon to a whopping 275 billion dollar deficit.   On the flip-side, it’s estimated that 50% of China’s trade surplus is due to exports to the United States.  Imports of high-tech goods from China now account for over 95% of that deficit.

This commentary from trade leads published in the Bags, Cases and Luggage section of our Business to Business Marketplace.

Politicians and industry pundits are watching countries such as China closely, and have made arguments to the World Trade Organization (the “WTO”) alleging that China subsidizes its own industries and penalizes foreign companies by incenting the purchase of locally produced goods and services.  Arguments are ongoing in front of WTO panels, with China relenting on several of its policies in recent months.  Washington continues to argue that a range of domestically produced goods in the United States, from steel, to paper, to computer products, are denied an opportunity to compete in the Chinese market and in third country markets where they are forced to vie with highly subsidized Chinese comparables.  Policymakers could, of course, design broad and severe trade restrictions to close the deficit by choking off imports, but this form of artificial protectionism would likely be seen as “tit-for-tat” retaliation which would only serve to escalate tensions and encourage further imbalance in trade relations.

Regardless of Washington’s view, America’s appetite for products based on “the lowest price” is a huge contributor to recent acceleration in America’s trade deficits – many experts see this as a culmination of both the unbalanced nature of global trade and one of the “costs” of globalization and free trade.

International trade is the exchange of goods and services across international boundaries or territories.  It is also a branch of economics, which, together with international finance, forms the larger branch of international economics.  International trade is a critical component of economic growth and the creation of jobs and wealth and can be considered a prime driver of how well a country develops, and affects how well the economies of different countries are doing.  It is regulated through a set of rules that the world’s governments have created over the years and is the backbone of our modern, commercial world, as producers in various nations try to profit from an expanded market, rather than be limited to selling within their own borders.  One view holds that nothing needs to be done to protect or promote trade and growth because market forces will tend to do this automatically.  In contrast, protectionism holds that regulation of international trade is important to ensure that markets function properly. 

Free Trade is a concept wherein a customer can buy products from anywhere in the world and no extra duty is levied on him or her for importing these goods.  Free trade offers benefits by allowing countries to specialize in production and leverage that which they can do most efficiently.  Most economists from the time of Adam Smith have favored free international trade and have opposed tariffs and quotas which can impose artificial boundaries on those countries.  A recent poll showed that 51% of people surveyed agreed that free trade is a good idea because it can lead to lower prices and the long-term growth of the economy.  However 44% of respondents argued that free trade is a bad idea because it can lead to lower wages and higher unemployment when local sectors cannot compete with cheaper imports.  Please see Trade leads from the Bags, Cases and Luggage section of the Business to Business Marketplace.
Many argue that poverty is the real enemy of the world, and that increasing or opening trade channels opens up markets for the products of the poor, which in turn diminishes poverty and provides the means, incentives and technical know-how to propel such societies from their impoverished economies.  Others believe that a growth in international trade is already undermining poor economies by increasing penetration by foreign companies and allowing exploitation.  Suffice to say that there is merit to both arguments.

In summary, there are various views relating to expansion through increased activity in terms of trade – each has merit and should be weighed into final policies of concerned governments.

With the increase in cheap exports from countries like China, more and more companies are interested in sourcing high quality products at the lowest possible prices from these manufacturing powerhouses – let’s face it, in many cases these companies have to look at imports in order to compete effectively in their space.

One of the major difficulties in trading with countries such as China is establishing the initial rapport with reputable and trustworthy partners that can manufacture and deliver products in line with specifications. The recent spate of product quality issues and product recalls underscores the need to partner with suppliers capable of manufacturing products to the high quality levels that consumers in the United States and other western countries demand.

This trade tip is brought to you courtest of trade leads from the Gifts & Novelties section of our Business to Business Marketplace.

International trade portals have been around since the birth of the world wide web. They serve to match buyers of goods and services with suppliers, often in different countries. Trade sites like alibaba and made in china have thrived as the concept of import-export has trickled down to smaller and smaller players on both the “supply” and “demand” sides of the equation. More recent entrants providing trade leads search services have concentrated on improving the user experience by adding functionality and improving the relevance of trade lead results. Business to Business marketplace sites like Fuzing.com have also endeavoured to vastly increase the speed at which they return these relevant trade leads.

So, when looking at the various portals, what is it that users should be looking for? We’ve put together a list of the most important factors.

• Search Functionality and Relevance - first and foremost, a good business to business marketplace will provide you with the tools necessary to find the trade leads for the products and services that you are looking for.  Most will provide you with a free-form search box that you can type your query into.  But the most important thing is that the resulting trade leads are what you expect them to be, and not just a jumble of disparate results.
• Categorization of “like” products – the best marketplaces will categorize their trade leads so that once you find something of interest you can see what category it belongs to, and then you can look at additional trade leads from the same category.
• Speed – another important factor is the speed of the site and the time it takes to return a relevant set of results.  There are a few sites around that boast millions and millions of product listings, but their search technology is sadly lacking as you spend literally minutes waiting for a single page of search results to be returned.
• Overall ease of use – the best business to business marketplaces offer a streamlined and intuitive interface that gets you quickly to the trade leads that you are interested in.

The economy today is global, and you must be part of the global economy in order for your business to prosper.  Many people believe that entering the international marketplace is incredibly difficult, and for this reason they never ask the right questions or take the necessary action to position their business for international trade.  All you need to get started exporting or importing is to know your business and to become acquainted with some simple terms and procedures.  As an exporter you make a product, sell it overseas, make a shipment and get paid for it.  Perhaps you act as a middleman, buying a product that is manufactured by someone else and reselling it at a profit to an overseas customer.  As an importer you would locate a product overseas and import it for sale domestically, acting either as a wholesale distributor or a direct seller to end users through a retail business.

Whether you are an importer or exporter, you may or may not need to worry about fluctuations in the exchange rates of foreign currencies, depending upon which currency you use to conduct business.

This General Trade tip is brought to you courtest of trade leads from the Clothing and Accessories section of our Business to Business Marketplace.

If you are exporting, you do not have to worry about the vagaries of foreign tax or employment laws because you are not setting up a factory there.  In most cases you will not have to worry about foreign sales taxes because the wholesale customer that you will be dealing with will likely be the party responsible for taking care of it (retailers downstream of the wholesaler may ultimately be the parties responsible for collecting sales taxes - as is the case in the United States).