Question

Trade Policy:

1. Give three reasons why President Trump imposed tariffs on Chinese imports like steel. (10 pts)
2. Was China dumping goods? How did China react? (10 pts)
3. Give two criticisms the President’s policy. (10 pts)
4. Describe the positive impact from the tariffs on Chinese imports on one company and the negative impact from the tariffs on Chinese imports on another company. (20 pts)

Answer 1

1. Three reasons due to which President Trump imposed the Import tariffs on Chinese products are:

• The US president blamed unfair policies and practices for imposing of tariffs on Chinese products.
• The tariffs are aimed at pressuring China to change longstanding trade practices that Mr. Trump says are hurting American businesses.
• To allow American companies to have greater access in china with dropping its requirement that American companies hand over valuable technology to Chinese partners.

2. China wanted American companies to share their valuable technology with the china. Along with that, it was not allowing American companies to expand their business in china.

In response to President Trump’s decision of imposing trade tariffs on Chinese goods, china responded by retaliating.

China has responded with import tariffs on U.S. goods. It has also delivered a written response to U.S. demands for trade reforms.

3. Criticisms of the Policy:

• The president’s critics accuse him of recklessly starting a trade war that will be bad for America and the global economy.              
• The tariffs are aimed at hurting China, but they could hamper the American economy and bring pain for consumers. This could raise the prices of goods and the consumers will suffer the most.
• Retailers, manufacturers and a wide swath of other American businesses have warned that the new tariffs could hurt their profits, hiring and growth

4. Many companies have suffered from the import tariffs on Chinese products by the US government. Some have suffered negatively and some have positively.

Tile Shops- they say that they get half of its products from Asia including China and may cut that to 25 percent due to these tariffs. Tariffs are a threat to its gross margin target of about 70 percent.

Wilmar International: Company says trade tensions between the U.S. and China improved short-term crush margins, contributing to a jump in second-quarter profit. Good for them.