Question

In: Economics

What industries in the US have been hardest hit by foreign competition? What are the potential...

What industries in the US have been hardest hit by foreign competition? What are the potential threats to the UNITED STATES (NOT THE FOREIGN COUNTRY) if these industries fail altogether?

Solutions

Expert Solution

According to the stats of the labour department of the US, the apparel manufacturing industries, printing industries and electronic manufacturing industries was hit the hardest due to foreign competition. If all this industries fail together it will have following impact on the US:-

  1. GDP will dip, and the growth rate will decrease sharply.
  2. Unemployement will rise.
  3. Loans taken by this industries will be act as a Non Performing Assets, thus banks NPA will rise.
  4. Dollar will fall with respect to other currency's.
  5. Imports will increase.
  6. Economy will become more volatile as any actions from government of other countries will have direct impact on US, due to its dependency.
  7. Investments in this sector will reduce, due to volatility.
  8. FDI in this sectors can also reduce, if government policies and actions are ineffective.
  9. Inflation rate will be affected if the international supply chain is affected.

Thus failing of this industries altogether will give a big blow to the US economy, thus government must interfere and must impose import duties in order to sustain or safeguard the interests of the local industries.


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