A trading nation is a nation where foreign trade constitutes a large portion of its gross domestic product. More specifically, a trading nation’s gross domestic product (GDP) is equal to the product (purchasing capacity / total value of marketable securities) that it produces in a given year divided by the number of units of currency used to purchase those securities. A nation that has high levels of foreign trade and uses the U.S dollar as its currency is often called a “farming nation” because its trading partners are many of the world’s most productive agricultural producers. One example of a trading nation that has a high level of foreign trade is Singapore, which is currently the largest manufacturer of automobiles in the world. Another example of a trading nation that has high levels of foreign trade is Zimbabwe, which is currently the largest black owned commodity producer in the world.
There are many reasons that the United States and Canada are considered a trading nation. One of the reasons that the United States and Canada are considered a trading nation by international trade statistics is that they have access to a variety of exporting goods from a number of foreign countries. Both the United States and Canada, for example, have access to a variety of products that are made in Germany, Japan, and China, which can increase the amount of products that they sell to other countries. These exports lead to increases in purchases by other countries, and consequently, an increase in the countries’ GDPs.
The second reason that the United States and Canada are considered a trading nation by international trade statistics is that they have a variety of sources of exporting goods to other countries. While the United States and Canada primarily export goods to the United Kingdom and Germany, other foreign trading nations, such as Australia, India, and China have also become significant suppliers to the United States and Canada. Canada and the United States have become important foreign trading partners because of the large amounts of exports that they receive from these other foreign trading nations. Exports from the United States and Canada to these other countries increase the amount of goods that the other foreign trading nations sell to the United States and Canada. The other foreign trading nations then sell these products to consumers all around the world. This increases the amount of goods that enter the U.S. and Canadian markets, and consequently, the amount of goods that are sold all over the world.