Question

1.    Name one example of a new trade barrier that the U.S.A has enacted on another country or region in 2019.  Explain the trade barrier and which type of trade barrier it is. Use economic terms from the first three lectures to explain whether you think this barrier may be helpful or hurtful to the economy. Since there are many new trade barriers that started, please do not repeat an answer from another student.

with cited sources

Answer 1

President Trump increased tariffs on nearly $200 billion of Chinese goods from 10 percent to 25 percent, increasing nationwide consumer costs by $32 billion annually. On May 20, the United States removed the steel and aluminum tariffs on Canada and Mexico, reducing the value of affected imports by approximately $12 billion. The latter action in turn reduced the additional consumer costs from the tariffs by $2 billion per year.

In addition to raising costs for American consumers, tariffs have also resulted in significant retaliation by other countries against U.S. exports.

To date, eight nations have levied retaliatory tariffs of 5 percent to 50 percent on approximately $131 billion of U.S. exports. This retaliation includes the action taken by China on June 1, which increased its retaliatory tariffs against the United States by up to 15 percentage points.

Following the reversal of U.S. steel and aluminum tariffs, both Canada and Mexico withdrew their retaliatory tariffs of 7 percent to 25 percent on approximately $20 billion of U.S. exports.

On May 10, 2019, the president ordered USTR Robert Lighthizer to begin the process of raising tariffs on essentially all remaining imports from China, valued at approximately $300 billion. Levying a 25 percent tariff on all imports from China—valued at $540 billion in 2018—would exacerbate current price increases that consumers face. Two-thirds of these imports are utilized by U.S. businesses to produce goods in America, meaning that new tariffs will also increase domestic production costs. Altogether, the tariffs on China can be expected to raise nationwide prices for both producers and consumers by $140 billion annually.

On May 23, 2018, President Trump ordered a Section 232 investigation into imports of automobiles and auto parts. If the Department of Commerce finds a national security threat, new tariffs will be levied on auto imports, increasing the costs of imported automobiles in the United States. The tariffs on auto imports will also increase costs for U.S. automakers, which could either raise consumer prices further, decrease U.S. auto manufacturing activity, or both.