Why US Import Export Data Plays A Significant Role While Studying Global Trade?
The United States is the single largest export and importer of goods. It has the world’s 3rd largest population and roughly accounts for 14% of global goods imports. Moreover, most international trade is done in the dollar as monetary means.
The US Contributes approximately 16% to the global GDP. Thus, it is no secret that any policy change the United States undergoes has ripple effects throughout international trade.
In fact, even the most minor policy change or postponement of passing specific bills regarding the economic and political policy can result in the bankruptcy of companies around the world.
The international markets are sensitive to a policy change by any country, but they are hypersensitive to a policy change by the US because of its vast market share. This is why US import-export data is so essential to most companies that trade globally.
How Changes That Originate In The US Can Affect The World
- Monetary Policy
The foreign exchange rate in the United States affects every country. Most of the world trade is carried out in the US currency of dollars. Any change in the exchange rate can affect the prices of production and supply.
This change in price could even affect Glatfelter Falkenhagen Gmbh, an exporter based out of Germany. Even rumours or a non-concrete change in policy could impact the international market.
An example of a highly volatile market would be the Bitcoin market. Although companies and countries all over the world deal in Bitcoin as a method of monetary transaction. The price of bitcoin boomed when its popularity increased.
This, coupled with the increasing price, limited supply and companies accepting payment through Bitcoin, caused the price to skyrocket. Until recently, Tesla accepted payment for the cars in bitcoin, a move that greatly expanded the popularity of this method of exchange.
Elon Musk, the founder of Tesla, recently announced that he would not be accepting payments through bitcoin or any cryptocurrency anymore as the toll of mining the cryptocurrency is disastrous for the environment.
Musk’s company Tesla holds a significant piece of the international Bitcoin pie. This announcement caused a panic in the international market, causing owners to dump their bitcoin before the price plummeted.
However, this move caused the price to plummet, bankrupting many that ran their business mainly on bitcoin. This example shows the way that the United States has on the international market and the pressing need for every business to have intimate knowledge of US import-export data.
- EXIM Policy Change
Since the US has such a significant stake in the world economy, even the smallest changes in policy can have unintended side effects. For example, in the case of Glatfelter Falkenhagen Gmbh, the company is based in Germany.
A tightening in US import policy regarding Germany can create a problem in their business. It may delay the goods or end up costing both the supplier and the importer more in excise duty.
This can be seen with the United States relationship with China. Not so long ago, China threatened to impose trade sanctions in retaliation to US President Trump’s policy to increase the tariffs levied on goods from China.
This political situation influences foreign trade greatly as the country that the US trades with the most is China. This comes under imports data and is vital to understanding global trade.
- Visa Policy
Global trade does not just include the trade of goods. It also includes the movement of services and people around the globe. Any change in visa policies could be detrimental to organisations that want to relocate trained personnel to the United States.
For example, a few years ago, an Indian businessman saw the demand for trained medical personnel in the US in the form of nurses and other aids with medical knowledge. Seeing this, he and a few investors got together to train the personnel in US standards and procure work visas for them.
The program was going seamlessly until 9/11 occurred, and the US tightened the policies regarding Visas. This change took months to implement, and as a result, the Indian businessmen lost their capital funding and had no choice but to declare bankruptcy.
This example further goes to show you that imports data is interlocked with all conditions that influence and affect a business environment. The political and social factors had an effect on their policy which in turn had an effect on global trade.
How To Get Ahead Of The Curve?
If everything impacts global trade, how do you get ahead of the curve enough to enact a first-mover advantage? Well, the answer is data and analysts. Knowledge is worth more than money, and understanding how different factors affect your trade will allow you to better prepare for threats and grasp opportunities better. To take advantage of all of your assets, you should invest in trade data.