Untitled Document
HOME > News Desk > Global

    분류 Global 학교 Port Vila International School
Trade war between China and the US - Tariff 2018-07-14 오후 2:18:00

Recently, Chinese products such as Technology goods (semiconductor chips assembled in China) which goes in televisions, smartphones and cars were affected by tariff making them 25% more expensive for the US consumers. In retaliation to US implemented tariffs, China has hit American agriculture, Car made in US and medical products.

A tariff is a tax imposed on imported goods and services. The start of tariffs was based on the system 'mercantilism.' This was based on the idea that strengthening protectionism is beneficial for the nation, gaining profit through the difference in trading revenue (Investopedia, 2018).

Not only is China and the US being affected by this tariff, countries like South Korea, Singapore and Taiwan may also be affected as well because of disruption to supply chains.

Trade war is a side effect of protectionism. This occurs when one country A raises tariffs on another country B's import, and country B retaliates and does the same or worse to country A. For example, Donald Trump the president of the United States of America believes that 'trade wars are good, and easy to win.' (Trump tweets, 2018). This stance is directly opposed to the majority of the world's economists and has widespread economic implications for millions of human lives.

Tariffs are normally introduced to protect domestic industries but there are inverse effects occurring. This US/China trade war has considerable economic implications. Producers in America who were exporting to China will be affected negatively, approximately $14bn per annum produced in America is sold to China, and a trade wars puts this income all at stake. US producers of grain, aircraft and vehicles, are extremely worried about these tariffs, as Will Hutchinson, a soybean farmer in Tennessee exports most of his product to China. According to Brent Radcliffe, the benefits of tariffs are uneven. This is because the government will have their revenue increased, and domestic industries will benefit having fewer competitors in the market, by having import prices increased artificially. This could be good for producers in some ways, but from a consumer's perspective, having less choice is unfair, and this often results in increased prices of products (Investopedia, 2018). US tariff on Canadian maple syrup will lessen the choice for US consumers, making them only buy American syrup.

Tariff will bring a massive decline in global trade, making everybody poorer and the history proven this fact.

Port Vila International School
  ◀ 이전글 | 다음글 ▶  
로그인 하세요