Question

how will Trumps efforts to eliminate NAFTA impact the balance of trade between the U.S. and Mexico. How have some of his efforts toward establishing tariffs already affected the markets?

Answer 1

The governance under Trump has now decided to alter and renegotiate the terms and conditions of North American Free Trade Agreement. It focuses to reduce the US trade deficit with Mexico. The condition will lead to the restriction on amount of imported material which qualifies as per the agreement. Trump has decided to seize the bilateral deficits which happen when imports of US from the trading partner are greater than the exports.

Trump has slapped the Chinese goods with high tariffs as they were supposed to cause damage to the US economy. This has led to the increased trade deficit with China as China has also imposed tariffs on imported goods from USA. The tariffs volatility has led to the price instability in US economy. The tariffs have also resulted in high manufacturing costs. The US farmers will be induced to produce less because of the less purchasing power of the Chinese people. Also, the US wines will also take a hit with high taxes in China