Question

Unlike Participatory Learning Activities, where the focus is on collectively generating and sharing one’s learning, Unit Exercises are individual endeavors. You will typically write a 500-word (+ 50 words) response using APA style format to questions posed in each unit where such exercises are indicated. The six-unit exercises, worth 5% each, will be posted in their corresponding units.

Question:

One argument in the debate surrounding globalization as you have learned in units 1 and 2 materials: Chapter 1 of the textbook is about the inequality between developed and developing nations. Do you think the recent increase in barriers (like more tariffs imposed by the USA on imports from China) to trade is a help or a hindrance to reducing inequality? Why?

Answer 1

Answer:US economic growth has been slowing in recent decades.In contrast,although weakning slightly in recent years,China economic growth policy has been robust.In combination with other factors,such as geo political interests and the two countries polar opposite political systems,this has led to an increasingly adversarial posture between the two economic superpowers.There are some factors need to consider in order to know trade barrier imposed on China by USA is a help or hinderance reducing inequality.

1)Trade diversion effects on China:shows that the ongoing US-China Trade war has resulted in a sharp decline in bilateral trade,higher prices for consumer and trade diversions effect(increae imports from countries not directly involve in trade war)

By analysing recently released trade statistics,the study find that consumer in US are bearing the heaviest burnt of the US tarrifs on China,as their associated costs have largely been passed down to them and importing firms in the form of higher prices.However,the study also find that Chinese firms have recently started absorbong part of the costs of the tariffs by reducing the price of the exports

2)While China loses,other economies gain: US tariffs on China made other players more competitive and led to a trade diversion effect..According to the report,US tarrifs on China resulted in Taiwan gaining $4.2 billion in additional exports to the US in first half of 2019 by selling more office machinery and communication equipment.

Mexico increased its exports to the US by $3.5 billion,mostly in agri-food,transport equipment and electrical machinery sector.The Europrean Union gained about $2.7billion due to increased exports,largely in the machineries sectors.

Vietnam's export to the US swelled by $2.6 billion,driven by trade in communication equipment and exports.

All these statistics,shows US tarrifs on China boost up Balnce of Trade around the world and helping reducing inequality.