The Washington Post ran a headline on March 3, 2018: “Trump insists ‘trade wars are good,...

The Washington Post ran a headline on March 3, 2018: “Trump insists ‘trade wars are good, and easy to win’ after vowing new tariffs.”

Source: https://www.washingtonpost.com/news/business/wp/2018/03/02/trump- insists-trade-wars-are-good-and-easy-to-win-after-vowing-new-tariffs/

Using the relevant international trade and investment theories, explain if imposing new tariffs on Chinese imports will help America win its trade war against China.

Solutions

Expert Solution

Trump insists ‘trade wars are good, and easy to win’ after vowing new tariffs.”

As stated above by Trump that "trade wars are good and easy to win", is a matter of international trade and which is governed by many major policies and processes. There are various international trade unions and terms of trade which all countries are bounded by. The trade war with China also put up many prospective in this regard. Let us discuss this in details.

As per the source, https://www.washingtonpost.com/news/business/wp/2018/03/02/trump- insists-trade-wars-are-good-and-easy-to-win-after-vowing-new-tariffs/, the trade of any country is the import and export both

If we restrict the import to our country from certain region or country then this impacts our exports also to that region..

Just after the announcement of the Trump, Jean-Claude Juncker, president of the European Commission, said the European Union was preparing retaliatory tariffs against Harley Davidson motorcycles, Levi’s blue jeans, and Kentucky bourbon, a move that could enrage Senate Majority Leader Mitch McConnell.

The Canadian official stated that the tariffs on steel and aluminum would not be acceptable and would retaliate.

The Trump mentioned in his tweet that US is majorly into imports from other countries and is ripped off by other countries.

The trade war with China is because of China is selling and exporting cheap quality steel and aluminium to the world and imposing tariff by America on it will lead to trade war between these two countries.

The US economy is the major economy of the world any restrictions or trade barriers by this country plays a very deep impact on world economy as US is the largest importer of prod cuts all over the world.

The WTO plays a very important role here to manage this trade war as China is also the member of WTO and in the most favored nation status.

The European commission filled the complaint with World Trade Organization that China is forcing the partner companies to setup their IP to China only which is against the WTO policy.

Even the Trump government official said that the introduction of tariff is only to protect as "Purely Defensive measure" to control the trade deficit of US.

This trade war resulted in Stock market crashes at many global markets, Struggle for Farmers and Manufactures at many countries and resulted to higher prices for consumers due to high import tariff by US.This trade war has been criticized internationally and even by US farmers and Industries too.

This trade war has very negative impact on US exports as prices of export products are increased and this led to difficulty in selling to other countries and reduces the profit of US companies also.This trade war also decreased the diplomatic relations of US and China and also slow downed the US growth.

So there are many argument as stated above regarding China and US Trade war and there is no win win for US to impose tariffs against China.

There must be a trade off between two countries and only healthy trade relations can help both the countries to grow and boost Their economies.

Rahul Sunny answered 2 years ago

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