Question

1. How does international trade impact you as a consumer and as a future titan of industry? What would new trade restrictions or trade deals mean to you as a consumer, and what would they mean for your firm?
2. In a global economy with free trade between countries, what kind of industry would you like your firm to be in, or what good/service or type of good/service would you like your firm to produce?
3. Trump’s trade wars. Who are they good and bad for? Are they a net positive or negative for society?

Answer 1

Hi there,

I will be answering your questions in three parts.

1) For any country, International trade constitutes a major chunk of revenue which is added to the GDP. However, there are downsides for those countries whose imports are more than its exports. On consumer's perspective, it reduces the demand for locally made goods as there are cheap alternatives of the same quality available which comes through imports. On Manufacturer's perspective, there will excessive competition (both price and non-price) with its foreign competitors which will make them difficult to survive in the market.

As consumers, these trade restrictions enable us to think about the best option available within the country. People will start checking the origin of the product and they will start getting satisfied if it is their country. As firms/manufacturers, it will give them an opportunity to flourish and grow by providing quality products to its consumers.

2) I would definitely be a part of the food industry because in US, it contributes more than 5% to its GDP every year and America being one of the largest producer and exporter of it.

3) We are aware of US China trade war. It had started due to few reasons

• The Balance of trade or trade deficit between the two countries is $419.2 billion in 2018 which means China imports less from the US.
• China had been accused for its privacy policies by the US through its products like huawei, and many mobile applications by sending personal information to Chinese servers.

This had ended up in trade war which had resulted in higher tariffs for goods which are imported from China.

I strongly believe that the trade war will encourage the people to start depending on product or service which are non chinese and more than that, it will create new opportunities and demand within the country itself. So it will create a positive impact to the society.