The topic “Challenges of the cultural differences in the international trade” will examine how the cultural differences affect business communications, international trade operations and brand image. The study will reveal the most common barriers in communication and contrast some of the communication differences between Chinese companies and American companies.Keywords: negotiation, international business, challenges of the cultural differences.1.2 IntroductionIn the age of the globalization, the international trade between the companies of different countries became the daily routine. Nowadays an international businessperson will face a lot of activities and procedures required to be fulfilled during importing or exporting certain products or services from abroad. Even though, importing and exporting procedures are very important to be examined, this paper is intended to describe and answer even more difficult questions, such as challenges of the cultural differences. Many business people would like to do business with the countries of the “third-world”, because of the cheap labor and cost of production, however, only few are able meet the agreement with the international suppliers, due to the cultural differences. Therefore, the ability to be aware and adjust to the cultural differences play one of the most important roles to any businessperson, who does the international business. 2.1 Cultural barriers in communication.The research of the cultural barriers in the international trade is closely connected with the religious and ethical systems, unspoken and spoken languages, and of course, five dimensions of Hofstede. Knowledge of the cultural difference allows the businessperson to analyze, predict and guide the manners, speech and actions in the way, which will be satisfactory to the business partner from different culture, and will lead to the desired outcome. However, very often, even the executives of international corporations are not able to successfully communicate with the partners from different culture. During the negotiation, process both of the parties will face different cultural barriers, which include language barriers, nonverbal barriers and stereotypes, and information in the system of management, in other words – Power Index.2.2. Language barriersThe most common and natural barrier to the effective communication is language. The practice of the international business has developed several basic recipes for overcoming this barrier. The main is the usage of the widely accepted language of international communications – English. The proficient knowledge of English is an absolute and indispensable requirement for any international manager in modern world.Communication through the interpreter or translator is significantly worse in terms of the effectiveness of the communication. Since the translators are not able to present personal and confidential arrangements in the way, favorable to your business, taking in the account the subtle nuances of business conversation, like the creation of the relaxed atmosphere or humor, which are indispensable attributes of business communication.Therefore, a company, which have serious intentions on entering the foreign market or engaging in the international trade, should consider this solution to the international communication, only as a transitional option.All nations without exception, are feeling deeply respected, when the foreign manager is able to communicate with them in their own language. This ability is a very flattering characteristic of a professionalism, and if we are talking about the Eastern or Southern countries, like China for example, this ability will result in enormous benefits for the business. In colonial ages of China, the importance of the native language was diminished and in genetic memory of many Chinese, the knowledge of the language for a foreigner is considered as the sign of high respect.2.3. Nonverbal barriers As the supplementary barrier to language, we can consider nonverbal communication and the evaluation of the nonverbal signs by a person of different nationality. Nonverbal communication include gestures, poses, forms of greetings, rituals, etc. For an international manager, the understanding and implementation of the nonverbal signs plays a vital role for argumentation of the ideas and perceptions to the international business partners, the understatement of the cultural negotiation behavior. The innocent gesture, incorrectly used pause in the communication, which would inadequately perceived by a foreigner, could result not only in the distorted impression on the business manager, but could have a serious negative impact on the personal relation of the interlocutor. Simply because all people perceive other people, no matter of their cultural background, through the “prism of their own culture and traditions”.2.4. Information in the system of managementAnother serious issue, which can significantly affect the international communication processes, is the influence of the centralization and decentralization in the system of the informational exchange, the processing of information and decision-making.It is well known, that cultures of the different nations differ significantly between each other in the relation to the control over the information, which circulates in the company, including the information received externally or the information delivered outside of its borders. For example, American firms combine clear centralization and the provision of the unhindered informational exchange between different levels of hierarchy. While the British companies has an exceptional limitations in the communication between different levels of the hierarchy. In China, the informational exchange is strictly hierarchic and fully controlled by the centralized management.To conclude, without considering more nationalistic communicational differences, a businessperson in the international business environment would have to conduct an intensive research with the practical examples to adhere to the above-described issue, to be able to effectively communicate in the foreign environment.3.1. Examples of the cultural barrier’s impact on the business and brand imageAs an example of the cultural barriers we can consider the KFC’s opening of their first restaurant on the Chinese market in 1987 in Beijing, with their famous slogan: “Finger Lickin’ Good”, the translation on Chinese is: “We’ll Eat Your Fingers Off”. Another example would be Peugeot, a French car manufacturer, which used the Chinese name “Biao Zhi”, however in the southern dialect of Chinese “Biao Zhi” sounds similar to the term used to describe the “human with the low social responsibility”.