International Trade and Governmental Influence

The discussion posts in this class require professional essays and are worth 10 points in total each week.

Original discussion thread post due by Thursday at 11:55PM (EST)
International Trade and Governmental Influence
Governmental actions to influence trade are known as Protectionism. Research an event related to Governmental Influence on Trade. It can be from the U.S. or any other nation. Thoroughly analyze and discuss What the influence was, How it was influence, and what the implications were. Be sure to present concrete examples. The article must be dated within the past 5 years and it needs to illustrate concepts from this week’s lesson
Cite 2 quality sources for this event. The textbook can be one of the sources
Other Requirements
The original post must contain a minimum of 300 words. Students must demonstrate critical thinking by paraphrasing the material into their own words
All citations should be in APA format with a reference listing at the bottom of the post.

Two reply posts are due by Sunday at 11:55PM (EST)*
Review other students’ posts before deciding what and where to structure reply posts. Students must post a minimum of 2 replies that must be unique to other students. Replies should build upon the original discussion thread (and other replies posted prior) with further details on lesson concepts, additional research, business examples, etc.
Replies require short essays and must contain a minimum of 100 words each. Replies must be constructive which means they do not simply state agreement or disagreement re-highlighting points already made in prior posts. Replies must offer additional information or input to the discussion and lesson concepts.
Research Help
All cited articles in this course must come from a reliable source to earn credit. If you need help with research, there is assistance available. Review the following resources:

Learning Resources Services for Students
SPC Online Library
Ethics Research LibGuide
Ask-a-Librarian
Learning Resources
Learning Resources’ Contact Information Guide
Academic Search Complete
America’s News

ANSWER

International Trade and Government Influence

Introduction

Governments rely on protectionism to influence international business. Protectionism entails policies that are placed for specific restrictions on international trade for the benefit of the local economy (Diziolia and Van Roye, 2018). The main effect of protectionism is to determine the prices of some goods, decline some trades and develop a subsidy for protected industries. Protectionist policies help lower import levels and enable countries to increase their trade balance. This paper will focus on an event related to protectionism and examine its influence and implication on trade.

America’s New Aluminum and Steel Protectionism

Government imposed tariffs are the main protectionism measures. Tariffs increase the price of imported goods making them more expensive compared to the domestic goods. The protective tariffs have historically been employed to enable the domestic companies boost their growth with less competition from international industries. Grabow (2018) states that during the Trump era, US imposed tariffs on steel from the EU, Mexico and Canada during the long standing trade disputes. The tariffs got tougher after the recent trade disputes with China which led to greater increase in the commercial risks and uncertainties for American companies.

Trump’s administration had imposed 25 percent tax on foreign steel and 15 percent duty on foreign aluminum which led to high criticism (Grabow, 2018). The tariffs made it cost prohibitive to import steel to the U.S which resulted to a linked cost problem for U.S industrial sectors that are reliant on on aluminum and steel as the raw materials. This has weakened the performance and competitiveness of manufacturers in the United States and potentially led to job losses.

United States is far from being independent in the supply of aluminum and steel and more than 30 percent of the amounts of steel being consumers are imports. With regard to the industrial significance of aluminum and steel, the tariffs imposed on the imports will considerably raise the production costs for the American manufacturers within all the industry sectors. In 2018, there were more than 80,000 employees in the United States in the steel industry and more than 56,000 in the aluminum industry that were employed in different sectors such as transportation of equipment, machinery and fabrication of steel products. The tariffs have resulted to job losses due to the direct damage on the steel and aluminum industries (Grabow, 2018). Relatively, the high production cost has been reflected to the consumer process since the manufacturers and retailers will have to increase their prices. This will affect the rate at which the Federal Reserve is trying to contain inflation and the risks of economic slow-down as a result of trade disputes.

The manufactures in United States are also likely to experience a possible break apart of suppliers in the supply chain which will directly influence the companies. This means that companies will encounter a severe shock on their performance especially for those that rely on cross-border supply chains. Companies will be required to restructure and reconstruct their supply chain which will not only influence their cost but also competitiveness in the global market.

Conclusion

In summation, protectionism in the United States has been implemented over decades in different sectors. Protectionism in most industries has failed to meet its objective which is industry revival and growth. Trump imposed tariffs due to trade disputes which led to negative impacts on the economy of the country. The tariffs have resulted to job losses, slow-economic growth, high steel prices and poor industry performance.

References

Dizioli, A. G., & Van Roye, B. (2018). Macroeconomic implications of increasing protectionism. Economic Bulletin Boxes, 6.

Grabow, C. (2018). Protectionists Agree: Steel and Aluminum Tariffs Will Leave Us Worse Off.