Made in America Vs. China
Several possibilities case the making of products somewhere else, such as how the industrialization paved the way for exports and imports. The other reason is that World War 1 and the Cold war was fueled by competitive trade. Ideally, free Trade Agreement and NAFTA Agreements eliminated 95% of taxes resulting in products being made elsewhere. The making of products somewhere else laid the foundation for globalization. In other cases, the free trade agreement impacts nations in two different ways: negative and positive. The free trade agreement results in expertise, that is, specialize in manufacturing. Also, it results in economic growth, that is,.1% – .5% a year. Consequently, the free trade agreement results in technological advancement, mainly in more jobs and improvements. The negative impact of the free trade agreement are unethical practices such as sweatshops, and stolen patents, crowd out domestic firms, for instance, small businesses can’t compete, and reduced environmental practices:
depletion of resources or pollution
Tariffs exist in this case and affect the economy. The tariffs are a tax or duty to be paid on a particular class of imports or exports. Also, they make consumer products or services more expensive to incentivize domestic goods. However, this will help local or national companies thrive, but may incite international conflict; trade war. In this case, there is an existence of the battle of the tariffs. They are fueled by accusations of China committing acts of deception. The US imposed tariffs on $250 billion on Chinese products. China retaliated with $110bn on American Products. Trump wants China to buy $419 billion US goods to close the gap.
In this case, the trending issues are United States imports face a 10% – 25% increase in imports from China. The other point is businesses will shoulder these burdens and face deficits. The Dow Jones average fell 6% and rose 11%. China has grown and fallen from 12% to 16%. The first countries that are also affected are Turkey, Mexica, Canada, Japan, and India. Tariffs have staggered small businesses’ productivity and growth. Ideally, raw materials have increased in price by 20%. Companies have faced an increase in expenses by 15% due to the Tariffs. The banks also got affected in different ways. Primarily, the banks in states that housed farming industries extended delinquencies on agriculture loans. Leveraged lending is a potential threat; 2008. Farmers have low demand, as consumers such as China refuses to purchase products such as soybeans.
In conclusion, the initial results that occurred are, China eased retaliation on tariffs imposed on US goods by 2.5% – 5%, China also pledged to boost imports by $200 billion. The US agreed to halve tariffs imposed on Chinese products. The potential outcomes are that COVID – 19 has changed the behavior of Chinese product consumers, and China and US relations remain static and potentially new sources of raw material manufacturing, that is, India.