International trade
International trade is the exchange of goods or services across national borders. It gives businesses access to customers, inputs and capabilities in other economies, while creating exposure to matters such as tariffs, trade rules, exchange rates and supply disruption. Benefits and costs differ between firms, workers and consumers; an overall gain does not mean every participant gains. Cross-border trade does not require the buyer or seller to own an overseas subsidiary.
Worked example
A domestic manufacturer buys components from an overseas supplier and sells finished products abroad. The purchases are imports and the sales are exports. A change in import tariffs may affect its input costs even if its own selling prices remain unchanged.
Common mistake
Equating international trade with foreign direct investment or assuming that increased trade benefits every firm and worker equally.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Supporting | September 2026–June 2027 |
| ACCA | SBL | Supporting | September 2026–June 2027 |
| FIA | FBT | Supporting | September 2026–June 2027 |