Chapter 10 Part 2 Flashcards
What is International Trade
The exchange of capital, goods, and services across international borders or territories
Import
a good or service brought into the domestic country
Export
a good or service sold to a foreign country
Products in the international Market
food, clothes, spare parts, oil, jewelry, wine, stocks, currencies, water
Services in the international market
tourism, banking, consulting, and transportation
Four T’s of International Trade
Transaction costs, transport costs, time costs, tariff and non-tariff costs
Exogenous (external factors) that affect international trade
Distance, transportation costs, travel time
Opportunities Presented by operating a global supply chain
increased revenue through global business, increased sourcing options with more potential supply sources, lower total cost with reduced material, labor, and other overhead cost
Challenges presented by operating a global supply chain
Tariffs or duties, trade wars, transporting goods across borders can be complex, customs and regulations vary by country, foreign markets are not homogeneous within a country, unexpected events like covid
International Freight Security
Since 9/11 there is more conflict between US government and industry regarding more security and restrictions for international shipments
Department of Homeland Security Responsibilities:
Prevent terrorist attacks, reduce vulnerability to terrorism, minimize damage from potential attacks and natural disasters
Customs and Border Protection
works to secure and facilitate imports arriving in the US, accommodating the increasing volumes of international trade
Trade Compliance Systems
automate the process of checking every transaction, automatically tells you things like how much youll be paying in customs fees, etc
Benefits of Implementing a Trade Compliance System
- increased compliance
- decreases physical inspections by US customs
- faster release of shipments from customs
- avoidance of fines and penalties
- opportunity to interface with other systems
Importer of Record
the owner or purchaser of a product that is importing it, they must file entry documents at the port of entry
Goods are not legally entered into US commerce until
- The shipment arrives at port of entry
- Delivery has been authorized by CBP
- Estimated duties have been paid
Tarriff
direct taxes imposed by the government on goods imported from a different country
Duty
indirect tax imposed on the consumer by the government on imported goods
Foreign Trade Zone
physical areas inside the US supervised by US Customs and Border protection that are considered to be outside of the US territory, usually located at/near port of entry
Foreign Trade Zone what happens
merchandise not subject to US duty or excise tax
Shipments must conform to Export Administration Regulations, what must the shipper do
Know the product or technology being exported, know where it is being produced, know where and to whom it is being sent, know who will use the product, know if there are any illegal restrictions in the order, L/C or other document
- Must also complete and submit a shippers export declaration
- Submit a commercial invoice for the product
Deemed export
the release of technology or source code that is subject to the export administration regulations, to a foreign national located in the US
Penalties for Violations
Criminal - fines, imprisonment
Civil- fines
Global Logistics Intermediaries- Customs Brokers
move global shipments through customs and handle documentation
