Question

Give the answer of all question in detail

The US President Donald Trump and his advisors have repeatedly said that they intended to get rid of the US trade deficit.

Question 01: What are the main industries responsible for this trade deficit? Support your answer with numbers (Words 200)

Question 02: What are the main countries responsible for this trade deficit? Support your answer with numbers (Words 200)

Question 03: As of April 8th 2018, list the goods and the countries for which the US has decided to create new tariffs. For these goods, what are the amounts currently imported by the US? (Words 250)

Question 04: List the US goods for which China has decided to create new tariffs. For these goods, what are the amounts currently imported by China? (Words 200)

Question 05: Assume that the new tariffs will decrease both US exports to China and Chinese exports to the US by 30% (only for the targeted goods). Building on your answer on questions 1 to 4, what would be the impact of the new tariffs on the US-China trade deficit? Support your answer with numbers (Words 200)

Answer 1

1. Automobile, petroleum and consumer goods industries drive the trade deficit. In 2017, US imported $ 602 billion in drugs, clothing and household items while the exports stood at $198 billion of consumer goods resulting in a trade deficit of $404 billion. In Automobile sector the import was $359 billion during the same period, while exports were only $158 billions thus adding $201 billion to the trade deficit. Petroleum imports were $183 billion against export of $71 billion, creating trade deficit of $109 billion.

2. Main contributor to the trade deficit is China with $347 billion, followed by Japan with 68 billion and Germany and Mexico with 64 and 63 billion respectively, Among others are India, S. Korea, Ireland, Malaysia and Vietnam with trade deficits ranging between $30-20 billion.

3. US decided to create new tariffs for steel and Aluminium imported from all countries except Canada and Mexico. The import levy will be 25% on steel and 15% on Aluminium. The countries willing the import tariffs to be waived off will have to negotiate with US trade representatives. The US imported steel worth of 34.6 million metric tonnes in 2017. The import of Aluminium was 6.3 million metric tonnes in 2017.

4. China slapped 25% tariff on 106 categories of goods including soyabean ( which accounted for $14 billion worth of beans imported by China), automobiles, civilian aircraft, engines and parts together accounted to $16.3 Billion. Rest include pork, chemicals and miscellaneous items.