These days, we're used to seeing products from all over the world lining store shelves. But have you ever wondered how international trade affects our economy?

This blog will go over the basics of importing and exporting, covering how it influences GDP, exchange rates, and inflation.

Trade and the GDP

The GDP stands for Gross Domestic Product. It's a measurement that represents a country's economic activity. Calculating the GDP is pretty complex, but the most important thing to remember is that a higher value is always better.

Exports directly influence GDP. Rising exports mean a high level of output from domestic industries. As a result, more money is coming into the country, and more workers are employed to keep up with demand.

When you look at US export data by company, you can see that some of the most in-demand exports are petroleum products and aircraft parts. They make up a significant chunk of all exports and help with economic stability. If you need US export data by company, visit this website.

Exchange Rates

Trade can also influence the exchange rate. Again, creating a defined connection is tough, but most economists agree that trade deficits are to blame.

A deficit occurs when the cost of a country's imports exceeds the value of exports. Looking at US export data by company, you can see how the exchange rate affects prices across the board due to our current deficits.

When the exchange rate declines and the dollar loses value, imports become more expensive. It also stimulates more exports. Conversely, a more robust domestic currency usually makes imports cheaper and decreases exports.

Inflation

Inflation closely connects to loan interest rates and the overall exchange rate. High inflation can be detrimental to exports, which has a rippling effect on our economic health.

It directly impacts material and labor costs. That causes prices to go up, forcing trade partners to look elsewhere for cheaper goods.

Importing and exporting is about more than just having access to a global supply of goods and services. It directly impacts our economy and influences every aspect of your financial well-being. Staying up to date on trade data can give you more insight into the economy, inflation, and more.

Read a similar article about incoterms definition here at this page.