Question

In your initial post, reflect on a current event in finance news or an event that has personally impacted you or your work recently that can be related back to the course concepts. Briefly describe the event or link to a related story and, in relation to your selected event, share at least two key takeaways related to course concepts that have impacted your understanding of the selected event and reiterated the importance of appropriately applying these concepts in corporate finance.

Answer 1

A current event in finance news is the U.S. – China trade war. With trade imbalances and increasing trade deficit President Trump rolled out tariffs and retaliatory measures have been following from both sides i.e. both from the side of USA as well as China and this has been affecting the global financial markets in a significant way.

This event has had a personal impact on me as I was hoping to join the manufacturing sector in future. My hope of making a strong career in the manufacturing sector lies deflated as the U.S. – China trade war has not led to shifting back of manufacturing to USA. Instead companies are shifting their manufacturing from China to other countries like Vietnam. As such my hope of increased job prospects in the manufacturing sector lies deflated and hence my chances to make a career in this industry have substantially reduced.

Two key takeaways are that (i): Global trade should be allowed to function in a systematic manner under a robust framework and proper mechanism. (ii): Issues like trade deficit cannot be handled overnight through imposition of trade sanctions and through raising tariffs. Instead it should be dealt properly by taking macro and micro policy initiatives.