The article explores how trade terms impact productivity using a model based on technology shocks in two countries. The balance between countries affects productivity levels, leading to synchronized business cycles. Foreign technology shocks can have similar effects as domestic ones. Changes in trade terms can cause consumption volatility and persistent productivity changes. The model closely matches the U.S. economy's global co-movement. Small open economies, like emerging ones, can be more influenced by foreign shocks than domestic ones. Trade terms significantly impact emerging countries' productivity.