Forget about Trade War: New Era of the International Trade

By xuanling11 | Crypto Learning | 27 Aug 2021

Forget about a trade war! We do not need any news to fear only because one country is pissed off by another and everyone is suffering.


What is international trade?

International trade is when one country expands its business globally and competes with another country's regional business.


Comparative advantage 

The idea behind international trade is for one country to focus on one specific type of goods they are good at and exchange for others with their products other countries are good at producing.


The flaws of the assumption 

The assumption is that all countries are happy with what they are doing.

They are not! Every country wants to develop and become powerful if it can. No one wants to make shoes forever. If they can make cars, they will make cars to trade for shoes.


Global trades turn to global protectionism 

Every country develops at different speeds and phases. Some countries are more advanced than others. Their cost of living is higher which reduces their ability to make basic goods. Other countries are less developed with lower living standards. Those countries can produce goods cheap which supplies to developed countries.

People love cheap goods that result in less competition domestically. Laborers may lose their jobs and lobby to change regulations to protect their jobs which results in higher taxes on foreign goods. It then brings the cost of living up domestically as a lose-lose solution.


China-United States trade wars

That was exactly what happened during the trade war.

The US claimed China unfairly traded and was a currency manipulator while China dominated global trade and became a global manufacturer.

Because too reliant on China as a manufacturer, any political opinion that triggers disputes with China may affect the global economy.


Currency war

The trade war dispute is a currency dispute. The US wants to buy more products from China but they also want to protect domestic labor with a high living standard.

These two contradictions can not be made at the same time.

A stronger dollar will result in buying more products internationally but it will reduce its exports of products that will slow domestic growth.

A weaker dollar will buy fewer products internationally but increase exports and expand domestic growth.


Cryptocurrency may be a solution to resolve global trade - a win-win solution 

Using cryptocurrency to trade internationally will resolve strong or weak currency arguments because the cryptocurrency is to use to purchase goods.

It will not be influenced by both sides of political or economic influence by only its technology and networkability to facilitate the trade.

It is a win-win solution.


In conclusion 

It felt like the trade war has passed behind us because we got crypto that can resolve the issues. The world will move forward with internet globalization that fiat currency may not influence anymore.

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Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose cryptocurrencies are mentioned in this article. This information is only for educational

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