HomeLearning CenterThe Future of International Trade: Understanding the Impact of Global Policies
Blog Banner

Author

LoansJagat Team

Read Time

5 Min

12 May 2025

The Future of International Trade: Understanding the Impact of Global Policies

blog

International trade means buying and selling goods between countries. This blog explains how global rules and new changes affect trade. We will understand with the help of simple examples how people and businesses are impacted.

 

1. Protectionism and Geopolitics

 

Protectionism means a country tries to protect its businesses by making foreign goods more expensive or harder to obtain. This can be done by adding extra taxes (called tariffs) or setting limits on how much can be imported. 

Geopolitics is about how countries interact with each other, especially in terms of power and politics. When countries do not get along, they might use protectionism to hurt each other's economies. 

 

Example: Gukesh's Toy Business

 

Gukesh is a boy who sells toys. He buys toys from Country X and sells them in his own country. But then, his country and Country X disagree. His country adds a 20% tax on toys from Country X. Now, Gukesh has to pay more to buy the toys, so he raises his prices. Customers do not want to pay more, so they buy fewer toys. Gukesh's sales go down, and he earns less money.

 

Item

Before Tax

After 20% Tax

Cost to Gukesh per toy

₹100

₹120

Selling price per toy

₹150

₹170

Profit per toy

₹50

₹50

Toys sold per month

100

60

Total profit per month

₹5,000

₹3,000

 

This table shows how protectionism can affect a small business like Gukesh's.

 

2. Supply Chain Disruptions and Resilience

 

Supply chain disruptions occur when unexpected events, like natural disasters or geopolitical tensions, interrupt the flow of goods and materials. Resilience refers to the ability of businesses to adapt and recover from these disruptions. 

For instance, during the COVID-19 pandemic, many companies faced challenges due to factory closures and transportation delays. To build resilience, businesses can diversify their supplier base, invest in local sourcing, and adopt digital tools for better visibility and forecasting. These strategies help ensure continuity and reduce the impact of future disruptions.

 

Example: Mukund's Electronics Store

 

Mukund owns an electronics store in Bengaluru. He imports gadgets from Country Y. Due to a sudden port strike in Country Y, shipments are delayed. Mukund decides to source some products locally and uses inventory management software to track stock levels. This helps him meet customer demand despite the disruption.

 

Item

Before Disruption

After Disruption

Monthly Sales (units)

500

300

Revenue per Unit (₹)

2,000

2,000

Total Revenue (₹)

10,00,000

6,00,000

Local Sourcing (%)

0%

40%

Stockout Days per Month

0

5

 

This table illustrates how Mukund's proactive measures mitigated the impact of supply chain disruptions on his business.

 

3. Technological Advancements

 

Technological advancements are transforming international trade by making it faster, easier, and more efficient. Tools like Artificial Intelligence (AI), blockchain, and automation help businesses reduce costs and improve operations. 

 

For example, AI can predict customer demand, helping companies manage inventory better. Blockchain ensures secure and transparent transactions, reducing fraud. Automation speeds up manufacturing and logistics, enabling quicker delivery of goods. 

 

These technologies also assist small businesses in reaching global markets through e-commerce platforms. Overall, technology plays a crucial role in enhancing international trade by improving efficiency and expanding market access.

 

Example: Kuldeep's Business Growth with Technology

 

Year

Technology Used

Product Sold

Revenue (₹)

2022

Manual

100

10,000

2023

E-commerce

300

30,000

2024

AI & Automation

800

80,000

 

In 2022, Kuldeep sold 100 products manually, earning ₹10,000. By adopting e-commerce in 2023, his sales increased to 300 products, generating ₹30,000. In 2024, with the integration of AI and automation, he sold 800 products, earning ₹80,000. This demonstrates how technology can significantly boost business growth in international trade.

 

4. Sustainability and Ethical Practices

 

Sustainability and ethical practices are important in international trade. They help protect the environment and ensure fair treatment of workers. Businesses that adopt these practices can reduce pollution, use resources wisely, and support fair wages. 

 

Consumers prefer products made responsibly, which can increase sales. Governments and organisations also encourage sustainable practices through regulations and incentives. Overall, focusing on sustainability and ethics leads to a better future for everyone.

 

Example: Megha's Sustainable Business Growth

 

Year

Practice Adopted

Products Sold

Revenue (₹)

2022

Traditional Methods

150

15,000

2023

Eco-friendly Packaging

400

40,000

2024

Fair Trade & Recycling

900

90,000

 

In 2022, Megha sold 150 products using traditional methods, earning ₹15,000. By switching to eco-friendly packaging in 2023, her sales increased to 400 products, generating ₹40,000. In 2024, by adopting fair trade practices and recycling, she sold 900 products, earning ₹90,000. This shows how sustainable and ethical practices can boost business growth.

 

5. Impact on Global Economies

 

Global trade policies can help or hurt developing countries. When trade is open, countries can sell more goods, create jobs, and grow. But if big countries add tariffs or stop buying, small economies can suffer. 

 

For example, if a country depends on selling clothes and the demand drops, many workers may lose their jobs. Also, if prices of important goods like food or fuel go up, poor families may struggle. So, trade rules must be fair to help everyone.

 

Example: Imran's Story

 

Imran is a 12-year-old boy living in a small village. His family makes and sells cotton shirts. When trade is good, they sell many shirts and earn more money. But when trade rules change, they sell fewer shirts and earn less.

Year

Shirts Sold

Earnings (₹)

Imran's School Attendance

2023

1,000

50,000

Regular

2024

600

30,000

Missed 20 days

2025

400

20,000

Missed 50 days

 

This shows how global trade changes can affect families like Imran's.

 

Conclusion

 

Global trade policies affect businesses, jobs, and families. Fair rules, technology, and sustainability can help everyone grow. Good trade means better lives for people like Gukesh and Imran.

 

FAQs

 

1. What is protectionism in trade?

Protectionism is when a country taxes or limits imports to protect its businesses.

 

2. How does technology help trade?

Technology like AI and e-commerce makes trade faster, cheaper, and easier for businesses.


Apply for Loans Fast and Hassle-Free

About the Author

logo

LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?

coin

Quick Apply Loan

tick
100% Digital Process
tick
Loan Upto 50 Lacs
tick
Best Deal Guaranteed

Subscribe Now