International trade refers to the import and export of goods and services between countries, which is an important part of the global economy. Since the global market continues to expand and become more interconnected, the amount and variety of international trade continues to grow.
The amount of international trade has grown significantly since the 1950s. In 1950, exports amounted to only around 2 percent of the world’s Gross Domestic Product (GDP). By 2019, the combined world exports of goods and services had grown to 27 percent of the world’s GDP.
The United States has the largest share of global exports and imports, followed by China and Japan. In 2018, the US imported $2.6 trillion worth of goods and services, and exported $1.6 trillion. China was the second largest importer and exporter, importing $2.2 trillion and exporting $2.1 trillion.
International trade volume is determined by economic factors such as the demand for imported and exported goods, political factors such as tariffs and quotas, and currency exchange rates. When these factors change, the volume of international trade can fluctuate. For example, in 2018, the dropping of tariffs by many countries boosted the amount of international trade.
International trade has a range of benefits, including increased employment, access to resources and markets, production efficiency, and diversification of industry and investments. By reducing costs of imports and exports, international trade can also lead to increased competition and lower prices for consumers, which can benefit the economy.
However, international trade can also create risks and issues. Trade deficits, when imports outweigh exports, can weaken a country’s economy. International trade can also create competition with domestic industries, which can reduce employment and wages.
The international trade landscape has changed significantly in recent years, with increased connectivity and new technology. For example, the rise of e-commerce has boosted the number of traders and ability to shop from sellers from around the world.
The current COVID-19 pandemic has had a major impact on global trade, with restrictions on travel, closed ports, and decreased demand for certain goods and services. Despite the negative impacts of the pandemic, some areas such as technology and healthcare have become more vital in the global economy and could lead to increased global trade in the future.
Overall, international trade has increased significantly over the past 70 years and is a major component of the global economy. From technology to healthcare and beyond, international trade is a valuable tool that can create economic benefits and help provide access to resources and markets.
