A trading nation is a nation in which foreign trade constitutes a high percentage of its gross domestic product. There are two types of trading nations, with one being predominantly agricultural and the other primarily industrial. The agricultural trading nation, such as the United States, is the world’s largest agricultural producer. The second type of trading nation, the industrial trading nation, like the United States, is heavily dependent on foreign trade.
For example, while the United States accounts for roughly 25% of Gross Domestic Product in the US, China accounts for nearly half of it. China’s growth spurt has caused it to overtake the US as the largest manufacturer of goods that are traded internationally. Because of this, many believe that China is the trading nation that presents the most threats to the US economy. One of the worries is that they will start manipulating their currency in order to gain an unfair advantage over the US dollar and place their own goods in the US market in order to protect their products from the competition. This could create a huge problem in global international trade, leading to increased tariffs on American goods and an increase in the country’s debt, all of which are currently a headache for the American consumer.
One of the reasons why the United States has so much trouble catching up with other countries when it comes to international trade is because it takes so long to get products to the market. Many products that are traded internationally are developed in the first country that they are exported to. Canada, for example, exports oil to all of its neighbors, most of whom are US trading partners. The time it takes to get these products to the marketplace is very short, which makes it difficult for American businesses to compete in the international market. However, by getting other countries to buy our goods, we can allow them the opportunity to develop their own industries and provide jobs for their own people, something that Canada is doing currently but hasn’t been able to do.