Benefits of Open Trade
Discuss non-monetary benefits open trade has contributed to the world since the end of WWII. Provide at least 2 examples. Why do you think these are important?
How have changes to US trade and tariff policies affected US trade with other nations? Consider recent (less than 2 years old) credible news sources to support your response?
Reply to these two classmate’s statements below whether you agree or disagree. State why and explain. or your faculty member. Be constructive and professional. You will respond in 100 words each statement
1)Open trade has yielded numerous non-monetary benefits that have significantly contributed to global development. One example is the promotion of international peace and cooperation. The European Union (EU) exemplifies how open trade fosters peace and collaboration on a global scale. Originating as the European Coal and Steel Community in 1951, the EU aimed to integrate member states’ economies to reduce the likelihood of war. Creating a single market with free movement of goods, services, and capital further strengthened political and economic ties among EU members, decreasing the chances of conflict.
Another example is the acceleration of technology and innovation transfers through open trade, leading to their global spread. International trade has significantly boosted the adoption of information and communication technologies like the Internet and smartphones. Multinational companies and global supply chains facilitate the transfer of these cutting-edge technologies and best practices to developing countries, providing more local innovation and development.
One notable change is the recent increase in tariffs on various Chinese products. Several vital policies have been implemented to address trade imbalances and unfair practices, particularly with China. Ambassador Katherine Tai talks about the direction received from President Biden to take further action to encourage the elimination of the People’s Republic of China’s unfair technology transfer-related policies that continue to burden U.S. commerce and harm American workers and businesses. (Tai, K. May 2024) The aim behind these tariffs is to protect American industries, promote the domestic manufacturing of U.S. products, and effectively make them more competitive against artificially low-price Chinese imports.
Office of the United States Trade Representative. (2024, May 14). US trade representative Katherine Tai to take further action on China tariffs after releasing statutory four-year review. https://ustr.gov/about-us/policy-offices/press-office/press-releases/2024/may/us-trade-representative-katherine-tai-take-further-action-china-tariffs-after-releasing-statutory
2) According to the Heckscher Ohlin approach, trade arises from differences in the availability of factor inputs in different countries and in varying proportions in which these factors are used in producing in different products. Opening to trade changes domestic production. There is an expansion in the export oriented factors. Then there is contraction in import competing sector ( the one using the country’s scarce factor intensively ).
By mid 2018 the united states had instigated a trade war . the last time the world had a trade war was in the 1930’s. the war had contributed to global losses of the general gains from trade and it made the great depression worse. PUGEL (2020)
In his election campaign for the presidency Donald Trump railed against unfair trade with foreign countries and unfair trade agreements such as the North American free trade area (NAFTA)
He argued that the US deficit with China, Mexico and other countries were clear evidence that the united states was loosing out on trade with these countries.
He vowed to fight for US interests, including threatening to impose 45% tarriffs (taxes) on imports from China and withdraw from NAFTA if other members such as Canada and Mexico would not renegotiate.
In January 2017, after his inauguration President Donald Trump with drew from the united states Trans-Pacific partnership which was a free trade agreement.
He also launched investigations into imports of solar panels, washing machines , steel and aluminium.
in 2018 in the investigation of solar panels and washing machines. The
Us international trade commission found that the rising imports had harmed US firms in each of these industries.
in January 2019, President Trump imposed temporary safeguard tariffs beginning at 30% for imports of solar panels and at up to 50% for imports of washing machines.
Reference
PUGEL, T. (2020). INTERNATIONAL ECONOMICS. (17), 13-14.
According to the Heckscher Ohlin approach, trade arises from differences in the availability of factor inputs in different countries and in varying proportions in which these factors are used in producing in different products. Opening to trade changes domestic production. There is an expansion in the export oriented factors. Then there is contraction in import competing sector ( the one using the country’s scarce factor intensively ).
By mid 2018 the united states had instigated a trade war . the last time the world had a trade war was in the 1930’s. the war had contributed to global losses of the general gains from trade and it made the great depression worse. PUGEL (2020)
In his election campaign for the presidency Donald Trump railed against unfair trade with foreign countries and unfair trade agreements such as the North American free trade area (NAFTA)
He argued that the US deficit with China, Mexico and other countries were clear evidence that the united states was loosing out on trade with these countries.
He vowed to fight for US interests, including threatening to impose 45% tarriffs (taxes) on imports from China and withdraw from NAFTA if other members such as Canada and Mexico would not renegotiate.
In January 2017, after his inauguration President Donald Trump with drew from the united states Trans-Pacific partnership which was a free trade agreement.
He also launched investigations into imports of solar panels, washing machines , steel and aluminium.
in 2018 in the investigation of solar panels and washing machines. The
Us international trade commission found that the rising imports had harmed US firms in each of these industries.
in January 2019, President Trump imposed temporary safeguard tariffs beginning at 30% for imports of solar panels and at up to 50% for imports of washing machines.
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