Trade and the Global Economy

For many years the United States Government encouraged American businesses to sell their products overseas. However, for the recent years America is buying more goods than they sell t other countries.

Moving further here are some vocabulary we should first understand, import is buy goods from other countries and export, is to sell goods to other countries.  A trade deficit occurs when you import more goods to other countries than you export. Trade agreements are made when countries when the government encourages trade between their countries. A trade agreement is just what it sounds like. It is an agreement among two or more countries that increases trade by making it more beneficial for both parties. But when they want to discourage trade among their countries, a trade barrier is formed. This is an obstacle to trade between two or more nations. A good example of a trade barrier is tariff or a tax on imported goods. Tariff make it more expensive to buy or sell imported products and therefore discourage trade.