Question

(In terms of the trade barriers between China and the US) What are your thoughts on the ongoing trade talks between the United states and China? President Trump has made it an important goal of his administration to try to level the playing for American producers.

Without letting politics outweigh the economics, offer your thoughts on their trade negotiations. Most agree that an all out trade war would negatively impact both economies, at least in the short run. Is this a fight worth sacrificing for?

Answer 1

Presently United States has taken a protectionist stance in order to safeguard their domestic manufacturer and firms. Protectionist stance of the United States is not only limited to the trade but United States has also limited the visas given to workers.

There is also a trade war happening between the unites States and China, whereby both nations have imposed hefty duties upon one another. Such a measure could be vital and beneficial in the short run only. For instance, the United States has registered a growth of about 2.3% last year. But in the long run, this protectionism stance could result in loss for everyone.

The trade war has disturbed the global supply chain and trust among different nations. The policy of tariff would ultimately result into a no trade situation. Whereby all the nations would lose out of revenue. With the outbreak of Corona virus the global interaction among different nations has already suffered.

The United States needs to rationalize their tariff barrier and create negative list of good and services only for a selected few. These measures could assist in sustainable growth perpetually.