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How do trade deals work under capitalist countries? (lemmygrad.ml)
submitted 2 weeks ago by reallybigShell@lemmygrad.ml to c/asklemmygrad@lemmygrad.ml
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How does the government of a capitalist country say "we'll trade you 50,000 tons of steel for $1,000,000" or something, they don't have direct control over the steel mills, so how does the government ensure their side of the trade deal is done? I get that in socialist countries this isn't an issue because it's a command economy (I think)

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[–] draco_aeneus@mander.xyz 4 points 1 week ago

You're right, these countries don't have direct materials sitting somewhere in a warehouse. These trade deals, thus, usually don't deal with direct exchanges of good.

Instead, the thing exchanged is usually promises or services. For example, "if you build additional power infrastructure on the border, we will provide zero-interest loans to the construction companies". Or "no tariffs on clothing and food for both our counties, ok?"