Question

Discuss the current application of trade tariffs being deployed by various nations, including the United States. What are the administration’s goals and strategies of each major country using this technique? Apply your knowledge of economics to probable outcomes

Answer 1

Trade War is as popular now as it possibly has never been before. The leading position is taken by US. It imposed tariffs on China, India, Mexico, and these countries in turn imposed retaliatory tariffs on US.

Tariffs are imposed with various considerations. For US, the reason for imposition of tariff is to protect the domestic workers and also to improve the Current Account Deficit. Because the US imports are higher than its exports therefore there is Current Account Deficit.To reduce imports tariffs have been imposed on goods from other countries which are major US trading partners. It should be taken note of that when US imposes tariff alone it might gain however all sections of US population would not. Suppose US wants to protect its manufacturing producers by imposing tariff on manufacture imports. Then the workers in manufacturing sector are better off in US however consumers who now face high price are worse off. If the intention of US government is to protect those workers then tariff is justified.