Various mechanisms can impact international trade, including currency fluctuations, excise taxes, subsidies, and embargoes. Currency fluctuations, such as the Canadian dollar's varying value against the US dollar, affect cross-border trade by altering the relative cost of goods.
- the total cost of goods that have been shipped to a
its destination including the original price of the goods, fees for transportation, taxes, custom duties, currency conversion that may apply
- usually is factored into the price at which the goods will be sold
EXAMPLE: buying a phone online and having to pay shipping and delivery fees
Excise Taxes
- taxes paid on the manufacture, sale, or
consumption of specific products within a country
- often included in the price of the product
EXAMPLE: Boston might give electric car owners
a break from excise taxes after the Boston City Council President filed a petition arguing that electric vehicles have significant emissions benefits over conventional vehicles, and thus shouldn't have to be taxed for this.
http://www.boston.com/cars/news-and-reviews/2016/04/13/boston-may-offer-electric-car-owners-break-excise-taxes/kaHJVOMzO5gG5cnCi574DL/story.html
Currency Fluctuations
- Changes in the exchange rates of different
currencies
EXAMPLE: The Canadian dollar dropped below
69 cents US in January and has topped 80 cents
US in recent trading
http://www.680news.com/2016/05/04/canadian-dollar-loses-another-cent-north-american-stock-markets-pull-back/
Standards
- laws or regulations establishing health and safety
standards for imported goods
- generally much stricter than those applied to domestically goods
EXAMPLE: Volkswagen released new cars that did no meet emission standards. They are now faced with penalties and fees for violating the Clean Air Act.
http://knowledge.wharton.upenn.edu/article/can-volkswagen-move-beyond-its-diesel-emissions-scandal/
Embargoes
- an official ban on the import and export of goods
from a specific country due to certain issues between the countries
EXAMPLE: U.S.A and Cuba had cut relations for a long time
and therefore, placed an embargo during the Cold War. However, after almost 60 years, leaders of both countries realized that they must forget the past and are working towards lifting this embargo and resuming trade between the two countries.
http://www.newsweek.com/cuba-embargo-president-obama-state-union-414972
Subsidies
- money granted by the government to help an
industry or business so that the price of a commodity or service can remain low and competitive
EXAMPLE: Ontario taxpayers have been helping to subsidize the ethanol industry and the funding has helped build a
competitive and vibrant industry in Ontario. However, this provincial fund expires at the end of 2016 and so the provincial government is planning to shift this funding to other green industries to help them get to on their own two feet.
http://www.cbc.ca/news/canada/toronto/taxpayers-ontario-canada-ethanol-subsidies-1.3566564
Tariffs
- a tax to be paid on imports and exports
- a country does this to protect its domestic industry as it increases the cost of imported goods to ensure that local industries are not harmed
EXAMPLE: Vietnam's agricultural produce will face strong competition from the US as the Trans-Pacific Partnership requires it to eliminate import tariffs on many US products. The removal of tariffs for corn and soybeans under the TPP has prompted many US firms to expand their production of animal feed in Vietnam.
http://www.world-grain.com/news/news%20home/LexisNexisArticle.aspx?articleid=2582125277
