Question

what YOU would do regarding US trade policy if you were the President today. Explain (in detail) WHY you would take this approach?

Answer 1

United States is considered as the biggest developed economy among all developed economy in the World. Current Federal Government has the constant approach of framing trading policy within the local area as well across the outside of the country. Protectionism policy of Trade tariff value is maintained by federal government in order to maintain the balance of imported items which includes agricultural and cotton goods. On other side in order to ensure the smooth running of the balance of payments, Trade policy of US are worked out by conducting various analysis and interpretation of export rate which has the link with all other countries. Apart from general discussion, i want to share my decision of framing trade policy if i become the president of US.

According to my opinion, I will study and view the present level of conditions of GDP inside the country. Actually, the balance of trade was determined by the high rate of GDP. I will forecast the level of GDP in future economy so that Trade Surplus can be maintained. High level of GDP will always fetch good rate of Trade. i.e., The export value will be more than the import value. In order to closely watch the trade policy governance, i will set up one Economic monitoring committee to prepare and frame the policies which helps to add few changes which encourage the growth of balance of payments.

I will impart advice to the executive members on Trade policy on periodical basis. According to my idea The trade policy should be framed on the basis of high degree of exchange value of currency reserves. The money supply and the inflation are the two main factors which makes the uncertainty in the balance of payment schedules. In order to avoid such constraints i will fix the tariff rate for both imported and export goods and services in a such a way that firms will not affected by paying the reasonable tariff rate by exporting their own goods and in another side when the firms started to import the goods, it need not to pay high tariff rate when compared to goods imported by other countries for the same product. I mean Trade Surplus should earn more foreign exchange reserves than Trade Deficit which should able to manage by the way of compensating less tariff charges.

I will frame the trade policy in such a way that not charge more tariff rate for necessary goods which are used in day-to-day life. And at the same time I will charge more tariff rate for more luxurious goods. This in turn will increase the purchasing power of all the people. And also i will grant more subsidies to the firms who earns more foreign exchange reserves by creating more employment opportunities in their own firms. More production of goods and services leads to increase in the rate of GDP. I will instruct the economic advisory committee to closely watch the updates of WTO and World Bank on Trade policy and development of all the countries. If any issue persists i will furnish the information to concerned group of firms in order to safeguard their business activities in the long-run and also to have amiable trade links with all other countries. This is my way of practical approach of framing trade policy which i will follow if i become as s President of US.