Effects of Tariffs, Changing Trade Agreements and Manipulating Exchange Rates on the Total US Trade Balance
Opinions of Credible Economists
According to economists, trade deficits are not necessarily beneficial to the USA. A stronger economy can result from a large trade deficit. As the imports and expenditures increase, the foreign investments increase. Additionally, the policies that block imports are not necessarily beneficial. When imports are blocked, it is necessary to change the levels of investment and underlying savings. Subsequently, this change should lead to a rise in dollar values and a drop in exports, which leaves a country poorer because the deficit does not change but still diminishes the overall trade. Other economists highlight the lack of correlation between overall unemployment and trade deficits. Even if imports threaten citizens’ jobs in certain sectors, new ones are created in other industries. Focus on trade deficits could awaken new wars in global trade and protectionism. Accordingly, these aspects would worsen the situation for all traders in an era when supply chains cross borders (McBride & Chatzky, 2019).
My Stand about These Assertions by Economists
I agree with these assertions by these economists because tariffs tend to result in unwanted consequences such as increased consumer prices. To add on, these tariffs also lead to ‘tit for tat’, which introduces trade wars. In addition, these trade wars are evident in the interactions between the USA and China. In essence, the trade deficits were unsuccessful in achieving the intended results. For instance, blocking steel imports over concerns regarding foreign subsidies could negatively affect the American steel industry. To conclude, the likelihood of economic instability due to such trade deficits is an alarming possibility, which, consequently, calls for the cessation or review of the same (Anderson, 2020).
References
Anderson, D. (2020). ON THE SPOT: How tariffs and trade agreements affect the economy.
McBride, J., & Chatzky, A. (2019). The U.S. Trade Deficit: How Much Does It Matter? Retrieved from Council on Foreign Relations: https://www.cfr.org/backgrounder/us-trade-deficit-how-much-does-it-matter#chapter-title-0-6.
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Question 
Effects of Tariffs, Changing Trade Agreements
Some politicians, labour unions, and special interest groups argue that US trade deficits are harmful to the economy and nations that run large trade surpluses with the US are benefiting from unfair trade practices and agreements. These parties support increasing tariffs on imports and elimination or re-writing of trade agreements.
Respond to the following in a minimum of 175 words:
Discuss what credible economists say about the effects that tariffs, changing trade agreements, and/or manipulating exchange rates will have on the total US trade balance.
Do you agree with their assertions? Why or why not?