In the world today many factors ultimately contribute to the world’s trading market. As America is a free trade market consumers are able to operate and barter with outside countries allowing it to be easier to balance the production possibilities curve. With the help of balancing exports and imports it can keep the economy from ending up in a trade deficit or even a trade surplus. However, maintaining an equilibrium is not as easy as it seems as the potential gains from world trade are faced with several different pressures that discourage it. To begin, the main pressure that is faced in regards to trade is microeconomic pressures. This comes from the ability that consumers are able to barter and intake goods and supplies at a lower price …show more content…
With that being said, the national security plays a vital role in discouraging trade as it has to play on both sides of the fence. In this case it means that it has to protect the nation first in time of need but at the same time rely on other countries as well. The trouble arises due to the idea that America has to provide for itself at times and have to rely less on importation. This is important as some of the most essential items and goods are to be found nationally rather than world wide. Another pressure that presents itself from trade disagreements is dumping. With dumping being the sale of goods at a lower price than the domestic price trade agreements could be halted as it is unfair for fellow competitors. As a result, dumping charges may be enforced allowing restrictions to be placed upon other nations. Dumping also, contributes to making it difficult for infant industries to start up as well. The restriction on trade causes an infant industry to have a higher start up rate, which means more capital that has to be taken out for the company. In retrospect, the pressures that discourage trade are an extreme burden to not just the free market but the economy as well. With the restrictions on trade that follow trading can be at risk for several of our