Decoding the meaning of International Business: Trading the goods and services including technology and capital, as well as exchanging knowledge and teachings across different borders is accounted under International Business. The exchange may be in currency or in the form of value exchange.
It becomes obvious that the business will vary across territorial as well as continental borders, depending on the trade &taxation rules and policies between the two trading countries. To speed up trade relations, more and more countries are befriending each other by mutually investing in infrastructure development and creating a pivotal role for themselves in policy structure of the friend county.
This blog thus focuses on a very important development of one of the world’s strongest nations, “United states of America”. The developing countries consider America as the kin-pin of many developments. To count a few let’s consider how Amerca’s support to Israel changed the trade situation globally. Since 1985 United States agreed to a GRANT TRADE to Israel at $ three billion. All custom duties between the two trading partners were eliminated and a free trade corridor still exists between USA and Isreal. In turn critical components of leading American high-tech products are invented and designed in Israel, making these American companies more competitive and more profitable globally. Cisco, Intel, Motorola, Applied Materials, and HP are just a few examples.
During the Israel-Palestine war situation America stood as an ally country, and dominating the supply of weapons and ammunitions to Israel. This boosted their intrinsic production of the weapons also helped other ally counties to improve their trade relation within the ambit.
There are six crucial aspects which get affected as the governance changes:
- Trade and supply chains
America has been estimated to have a Trade deficit of $78.2 billion dollars till November 2024. And this is going to be the main focus of Donald Tumps’s new Trade policies, and thus banning TIK TOK in America comes first tin the wave.
(The simple application of the concept being that why should foreign companies benefit which the native companies are incurring losses.) Though seemingly the financial burden increases on the native purchasers but, eventually it will boom the domestic production.
- Technology:
While the American election campaigning was in its full swing, Ellon Musk the owner of Twitter -X role in favour of Donald Trump got evident. As a symbiotic agreement both the capitalists will be now mutually benefiting from each other after Trump’s victory.
While Artificial Intelligence is already in its full swing of commercialization and work adaptation by people of most countries, Ellon Musk is already ready with the newest invention of all times the “STARLINK”. A data transmission system that will seamlessly connect people across the globe. Therefore, the Technological policy issues will remain in the forefront of the power axis.
- Taxes and Taxation:
Worried about the Dollar (currency) value, the newly elected US President has ensured that the us along with the European Union will ensure all the measures to keep the dominating currency value of Dollar at its best.
- Climate and environment:
As the global population is on a rise, most of the developed countries create a greater thrust in pushing the sustainable growth measures forward. Now as a developed country, maximum responsibility lies with America itself. Its economic growth dependency on the developing countries like India and China is evitable.
- Workforce
US President Donald Trump has withheld the illegally entered immigrants and the children born next month to the parent immigrated. Addressing to the immigration challenges — at the border and in terms of legal and undocumented immigration policy to remain a divisive issue on the second presidency trail.
Yet another interesting development that has taken the world by a swamp is a tiff between America and France in terms of acquiring Greenland. After Donald Trump’s threat to occupy Greenland, France said, if needed, we will send troops to protect Greenland. Therefore, this indicates NATO countries moving towards a confrontation with each other. He has indicated that he is considering taking this huge Arctic island from Denmark through military force or economic pressure. This will be significant as the trade ties will further get affected by this sudden interference.
India’s Stand on the International Business Scenario: American Election effect
India is said to benefit in trade as the Trump government follows the same ideological parlance of empowering the capitalists to create an infrastructural nation.
But delving deeper let’s look at the various factors that will alter the trade factors for India the in International Business
FDI – FOREIGN DIRECT INVESTMENT
Indian foreign direct investment is directly driven via American Trade exports. India charges a high tariff selling the Indian surplus. The Trump government critically specified that America might change the tariff in America goods sold in India as they need to bridge the gap in the American Trade deficit. Best quality wheat grain, Sugar and Potato are amongst some of the commonly required goods from India. Along with this the high quality Indian cotton dominates the American Apparel Industry in America.
Currency and Financial Markets
To increase the Indian rupee has been a prime focus of the Indian Govt. Though much lesser still than the value of American Dollar and the Euro, Indian rupee has been steadily improving its value in the global currency market. A stable governance, Indian intrinsic production industry for the defense sector and creating more avenues for exporting the arms and ammunitions has given a much better projection indication stability and reliability for the Indian currency. The Indian Prime minister will ensure this by keeping good relations with the American Economy because if global market sentiment turns risk-averse, capital outflows from emerging markets like India could lead to a depreciation of the rupee, increasing the cost of raw material.
An Influx of foreign investment in turn could give a strong impetus to both the production and manufacturing as well as generating employment opportunities and skill development for the younger upcoming Indian youth.
Supply Chain restructuring:
The exact sales increase is directly proportional to a well-established supply chain management. The focus of all developed nations is shifting towards building more resilient supply chains that can withstand shocks from tariffs, natural disasters, or political instability. This involves diversifying suppliers across different regions or investing in local manufacturing capabilities to reduce reliance on distant markets. Companies in technology and consumer goods sectors are exploring bringing production closer to home markets in North America or Europe. To mitigate risks associated with long distance logistics and tariffs. This trend not only enhances supply chain resilience but also aligns with growing consumer demand for locally produced goods.
Emphasis on Sustainability
As the recent G-20 summit, all other global unions and organization are now pushing their way upwards towards more sustainable and Eco friendly development. As sustainability is becoming a core component of new business strategies in most of the western countries, the Asiatic countries are pushing the concept of “zero carbon foot print consumerism”.
All companies are investing heavily in sustainable practices and ensuring methods to reduce the environmental pollution.
Energy conservation and adopting renewable energy sources, reducing waste, and sourcing materials responsibly.
The Biden administration has made climate change a priority, which could lead to stricter regulations on emissions and environmental practices. As a result, businesses that proactively adopt sustainable practices may find themselves better positioned to compete in both domestic and international markets. Solar Panels, e vehicles and solar cookware have already established a strong foothold in the Asiatic manufacturing land. Firms that commit to carbon-neutral operations by 2030 may attract investment and customer loyalty as sustainability becomes a key differentiator in purchasing decisions.
Global Economic Relationships: The Rise of Emerging Markets
The DEVELOPING COUNTRIES are becoming the center of Economic growth and expansion. Global economic landscape is witnessing a notable shift towards emerging markets in the Global South. Countries in Asia, Africa, and Latin America are increasingly becoming hubs for manufacturing and innovation. This trend presents significant opportunities for businesses willing to invest in these regions. With their growing middle classes and increasing consumer demand, these markets offer new avenues for growth. Companies that can navigate local regulations and cultural nuances will be well-positioned to capitalize on these emerging opportunities. Additionally, partnerships with local firms can enhance market entry strategies by providing valuable insights into consumer behavior and preferences.
Conclusion:
The main focal point of the entire debate rests on the fulcrum of how the strong countries like America, European Union, China and India adopt to the newer trends thus creating the exemplary notes for the smaller countries.
If a whole nation like Bhutan can be trend setter in exemplifying the zero carbon emission nation, the onus of the developed economies certainly becomes of prime importance.