Question

President Trump proposed the new “America First” policy, in regards to the trade agenda. This new policy may backfire and hurt the economy rather than protect it. A specific part of this new policy are the tariffs Trump imposed on Chinese products, and there are several articles arguing how these tariffs are backfiring and hurting our economy.

****However, if these tariffs are so bad, why are we using them? What can they accomplish-potential value they hold- how can we use them to benefit us with this new trade policy??*****

Critique Trumps "America First" policy IN REGARDS TO TARIFFS SPECIFICALLY and debate different viewpoints(competing ideas)

Use credible sources to back up claims and bring different viewpoints- cite courses where you use them

Talk about the PLUS SIDE of tariffs in regards to (SPECIFICALLY) the US-China trade war. There are plenty of articles degrading these tariffs and how they are bad for the economy, but can you discuss the potential value they hold and how we can use them to benefit in regards to the US-China trade war.

Answer 1

Tariffs are harming the price level in the american economy as chinese imports turn expensive, consumers are shelling more for such products, which has led to inflationary pressure in the economy. This has also led to increase in domestic prices and domestically procured goods as they try to marginally decline the domestic price of such items and make the chinese imports expensive. It turns expensive for domestic manufacturers to procure items from China as they have to pay a higher tariff, this makes the domestic final product expensive as input costs rise as seen in the case of Apple products, this also reduces sales. Thus it makes the imports expensive.

With higher tariffs it becomes difficult for China to manipulate its local currency, as the american consumer ends up paying more. Prior to the tariffs the american consumer used to prefer chinese goods because they were cheaper and acted as a good alternative as compared to the domestic goods which were expensive. Thus China's exports turn expensive to the american consumers because of the tariffs which has reduced the lucrative advantage of China. With reduced sales of chinese goods because of the tariffs, there is higher demand for domestic goods which increases the employment opportunities locally and domestic investment, thereby increasing savings. Plus by imposing higher tariffs the US has been able to earn more as payments go direct to the US Treasury.

Source: CNBC, Bloomberg