U.S. Trade Policy in the Past Two Years
There have been a lot of changes to the United States trade policy in the past two years, but perhaps the most prominent change is the America-China Trade War. The past two years were still under the leadership of the Trump government, which was characterized by significant and sometimes controversial decisions. One of these decisions was the tariff changes on selected Chinese goods, which caused a reaction from the Chinese government that created an international trade war. This essay examines how this war impacted individuals and businesses. Our assignment writing help is at affordable prices to students of all academic levels and disciplines.
Impact on Global Trade Activities by Multinational Corporations
The U.S.-China trade war has significantly affected the activities of businesses that operate internationally, especially those that depend on China for some of their activities. One of the effects of the war has been access to raw materials. Many businesses have a harder time accessing their raw materials from other countries (Ching & Li. 2018). One of the policy changes during the war was the introduction of new tariffs on a selection of Chinese products with the goal of reducing American dependence on this market. Businesses would be forced to produce locally to avoid the higher costs of importing. However, this policy mainly just made business operations harder for local businesses by making importing processes too expensive.
The trade policies against China had a domino effect as they prompted China to respond. China responded to the United States by also creating new tariffs that would make trading with the country even more expensive. Many American businesses depend on China to manage their costs. Goods and services in China can be significantly cheaper than in the United States. Therefore, the businesses choose this market to make profits. Thus, these policies have strained a lot of multinational businesses. Smaller businesses may be forced to close if they are unable to meet the cost requirements caused by the increased tariffs.
The Long-term Effects of Trade and Tariff Policies
The true long-term effect of the trade and tariff policies that have been implemented in the past few years is hard to accurately predict. However, some economic experts have evaluated the trends and believe that the tariff changes will likely have some long-term effects. One of the predicted long-term effects is on America’s GDP. Efraim Berkovich, a professional economist and professor, argued that the increased tariffs would reduce foreign cash flows to the country. The exportation of American products and services is what brings in foreign capital. Hostile international trade environments discourage such in-flows. When such hostile environments exist for a long time, there is an increased risk of a reduced GDP (Arvanitis, 2019). The same opinion is shared by Mary E. Lovely, a professor of economics. She argues that increasing tariffs might seem like a good idea in the short term, but it can negatively affect the country’s economy in the future. Expensive tariffs will discourage people and businesses from trading with the United States, hence reducing currency inflows.
The Effect of Recent Changes to Trade and Tariff Policies on Individuals and Employers
The policy changes that have been implemented in the past few years affect people at the individual level. The effects that they have on businesses also translate to their employees. The back-and-forth retaliatory policies from the United States to China have strained a lot of small businesses that operate between the two markets. I know a person who was in the business of selling solar panels. Because of technological development in China, it was easier to access the panels for cheaper. However, with the policy changes, it has become very hard to get affordable solar panels. It no longer makes financial sense to continue with the business as profits have declined significantly. He has been forced to lay off some workers to keep the business afloat as the costs are much higher than before. If he does not find a cheaper source of raw materials, the business will continue to struggle and might be forced to fail. This case is an example of the significant impact increased tariffs have had on small businesses. Larger businesses can perhaps make some adjustments to take in the impact, but small businesses do not have that luxury.
References
Arvanitis, R. (2019). What are the long-term costs of the China-U.S. trade war? https://knowledge.wharton.upenn.edu/article/u-s-china-tariffs/
Chong, T. T. L., & Li, X. (2019). Understanding the China-US trade war: causes, economic impact, and the worst-case scenario. Economic and Political Studies, 7(2), 185-202.
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Question 
U.S. Trade Policy in the Past Two Years
Promoting international trade is not a zero-sum game. It is a win-win proposition; both parties gain from trade.
Consider the following:
Tariffs are paid by the citizens of the country imposing tariffs, not by the citizens of the country producing the products upon which the tariffs are levied.
The term “trade deficits” is a misnomer. Every country’s trade is always in balance.
Trade deficits do not mean the US no longer produces anything to export. The US is the world’s second largest manufacturer and the world’s second largest exporter of manufactured goods.
Trade deficits reflect a strong economy. Trade deficits rise during economic expansions and fall during economic contractions. Unemployment falls as trade deficits rise and rises as trade deficits fall.
Imports and exports are complements, not competitors. Both are necessary and both contribute to economic growth.
Roughly one-third of all US imports and exports is trade between US multinational companies and their overseas subsidiaries.
Foreign-owned companies operating in the US number in the thousands and provide directly or indirectly jobs for more than 13 million US workers (roughly, 10% of the US workforce).
US trade deficit in goods in 2018 (as a % of GDP) was the same as it was 5, 10 and 15 years earlier.
The rise in US goods trade deficit with China has not increased the US total goods trade deficit. It has been offset by reduced goods imports from other trading partners.
There is a strong correlation between the rise in world trade and:
The rise in world GDP
The dramatic fall in the world’s extreme poverty rate
The rise in world life expectancy
For every US manufacturing job lost to trade between 2000 and 2010, seven US jobs were lost to domestic productivity improvements. Those seven jobs cannot be brought back from overseas because they never left the US.
Write a 700- to 1,050-word evaluation of credible economists’ unbiased opinions on the benefits, costs, and results of current US trade and tariff policies. Complete the following in your evaluation:
Evaluate how US trade policy changes in the last 2 years affect global trade activities by multinational corporations.
Discuss credible economists’ opinions on the long-term effects of trade and tariff policies changes in the last 2 years.
Explain the effect of recent changes to trade and tariff policies have had on your employer, you, or someone you know.
Cite at least 2 academically credible sources.
Format your assignment according to APA guidelines.