Economic and Financial Forces the Essay

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S. would need to pay relatively more U.S. dollars (the imports would be paid in U.S. currency, which would be weaker).

However, there are several other things that need to be taken into consideration when analyzing the profitability of this venture. If an international crisis, such as a drought appeared, it would be essential to analyze how this affects the product that the U.S. is exporting (grain) and the product it is importing (cars). In terms of the first, if the grain production in the U.S. is not affected by the drought, then one can say that the exported grain is relatively more expensive, because of a constant demand compared to the decreasing supply (due to the drought) on the market. The U.S. would then be able to charge more for the product it is exporting.

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The car industry is not affected by the drought, but it could be affected by a problem in iron supply, affecting the production of cars. If this occurred, it depends how the car producing industries in Germany and the UK are affected by this and whether they can find alternative sources of supply.

At the same time, the state of commercial relations between the U.S., on one side, and Germany and the UK, on the other, are extremely important in this evaluation. In the trade barriers increase, including, but not limited to an increase in customs duties, the U.S. exports will be affected by this, leading to an overall increase in the expenses associated with the exporting operation. Any additional trade restrictions….....

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