Key Factors Affecting Prices in Foreign Trade

What Factors Influence Prices in Foreign Trade?

In international trade, the price of goods is not isolated but is influenced and constrained by various factors. These factors include macro-level changes such as market supply and demand relationships and exchange rate fluctuations, as well as micro-level details like transportation costs and policy regulations. To better understand this complex system, we need to analyze it from multiple perspectives.

Firstly, the supply and demand relationship is the fundamental force determining the price of goods. According to economic principles, when there is a shortage of a certain commodity, its price often rises; conversely, it will fall. For example, with the continuous growth of global energy demand, oil prices have repeatedly hit new highs, directly affecting the cost of importing oil for related countries. At the same time, with the development of new energy technologies, the demand for traditional fossil fuels is gradually decreasing, which also prompts changes in the international energy pricing mechanism. For enterprises engaged in foreign trade, closely monitoring the supply and demand dynamics of target markets is crucial.

Secondly, exchange rate fluctuations are also an important variable affecting foreign trade prices. Exchange rates not only relate to the settlement profits of import and export enterprises but may also change the international competitiveness of products. For instance, the appreciation of the Renminbi puts greater pressure on export enterprises because the actual selling price of commodities priced in US dollars decreases overseas, thereby weakening the price advantage of Chinese products. Conversely, if the domestic currency depreciates, it helps enhance the cost-effectiveness of export goods. Recently, due to the enhanced expectation of Federal Reserve interest rate hikes, the strengthening of the US dollar has become a major trend in the global foreign exchange market, presenting new challenges to economies dependent on exports.

Thirdly, logistics costs constitute the hidden cost component in foreign trade transactions. Whether by sea or air, international freight costs directly affect the final commodity price. Especially during the pandemic, supply chain disruptions led to shipping tensions, container shortages, and port congestion problems, causing logistics costs to skyrocket. Data shows that at the beginning of 2025, the container freight rates for the Asia-Europe route increased nearly threefold compared to the same period last year. This situation means higher operational risks for businesses and also reminds us to fully consider risk-sharing mechanisms in transport during contract signings.

Policies and regulations must not be overlooked. Various tariffs, quotas, and other trade barrier measures imposed by countries will have far-reaching impacts on market prices. For example, the EU's recent implementation of a series of environmental protection regulations requires importers to provide detailed carbon footprint reports, creating additional obstacles for some high-energy-consuming industries' export business. On the other hand, some developing countries may restrict the inflow of foreign products by imposing high tariffs to protect their own industries. Familiarity with and adaptation to different countries' laws and regulations are essential skills for enterprises participating in international market competition.

Lastly, force majeure events may also cause price fluctuations. Natural disasters, war conflicts, or public health crises and other sudden events often exceed human control but can instantly change the global economic landscape. Take the COVID-19 pandemic as an example; this global outbreak not only disrupted normal production orders but also caused shortages of raw materials and labor, pushing up the costs of various goods. In response to such situations, enterprises need to establish flexible emergency response mechanisms to quickly adjust strategies and avoid potential losses.

In summary, the influencing factors of foreign trade prices are intricate, covering multiple fields such as economics, finance, and law. Only by thoroughly understanding the interactions between these factors and adopting scientifically reasonable countermeasures can one remain invincible in globalization competition. Looking ahead, with technological progress and changes in the market environment, we believe that the price formation mechanism in the foreign trade sector will become more transparent and efficient.