Promoting international trade is not a zero-sum game. It is a win-win proposition; both parties gain from trade.

Consider the following:
• Tariffs are paid by the citizens of the country imposing tariffs, not by the citizens of the country producing the products upon which the tariffs are levied.
• The term “trade deficits” is a misnomer. Every country’s trade is always in balance.
• Trade deficits do not mean the US no longer produces anything to export. The US is the world’s second largest manufacturer and the world’s second largest exporter of manufactured goods.
• Trade deficits reflect a strong economy. Trade deficits rise during economic expansions and fall during economic contractions. Unemployment falls as trade deficits rise and rises as trade deficits fall.
• Imports and exports are complements, not competitors. Both are necessary and both contribute to economic growth.
• Roughly one-third of all US imports and exports is trade between US multinational companies and their overseas subsidiaries.
• Foreign-owned companies operating in the US number in the thousands and provide directly or indirectly jobs for more than 13 million US workers (roughly, 10% of the US workforce).
• US trade deficit in goods in 2018 (as a % of GDP) was the same as it was 5, 10 and 15 years earlier.
• The rise in US goods trade deficit with China has not increased the US total goods trade deficit. It has been offset by reduced goods imports from other trading partners.
• There is a strong correlation between the rise in world trade and:
• The rise in world GDP
• The dramatic fall in the world’s extreme poverty rate
• The rise in world life expectancy
• For every US manufacturing job lost to trade between 2000 and 2010, seven US jobs were lost to domestic productivity improvements. Those seven jobs cannot be brought back from overseas because they never left the US.

Write a 700- to 1,050-word evaluation of credible economists’ unbiased opinions on the benefits, costs, and results of current US trade and tariff policies. Complete the following in your evaluation:
• Evaluate how US trade policy changes in the last 2 years affect global trade activities by multinational corporations.
• Discuss credible economists’ opinions on the long-term effects of trade and tariff policies changes in the last 2 years.
• Explain the effect of recent changes to trade and tariff policies have had on your employer, you, or someone you know.

Cite at least 2 academically credible sources.

Format your assignment according to APA guidelines.

Submit your assignment.

The Benefits, Costs, and Results of the Current

US Trade and Tariff Police

ANSWER

The benefits, costs, and results of current US trade and tariff policies

Introduction

Since World War II, the US trade policy has been in place to liberalize the markets through the reduction of trade and investment barriers through agreements and negotiations. The trade policy has also had the role of fostering an open and non-discriminatory rule-based system, which includes the world trade organization.  The policy in place helps in enforcing trade commitments, supporting the economic growth of the country and ensuring that the US firms are protected against unfair trade practices and competition by companies from other nations

(York, 2020).The trade policy also greatly helps in economic engagement and confrontation with nations such as China and other trading partners. The United States is also pursuing trade liberalization by having trade negotiations and policies that boost and protect agricultural markets in the developing nations, a factor that seeks to stimulate economic growth and development.

How US trade policy changes in the last two years have affected global trade activities

US Policy changes in the last two years have had a number of impacts on global trade activities, mostly multinational companies. First, some of the changes have brought about trade wars with countries such as China. This has led to a need for more bilateral trade agreements between the two nations to maintain a balance of trade. Another impact of changing trade policies is that the US firms have been able to penetrate new markets across the globe, leading to increased trade activities and enhanced revenues for the companies and the country at large (Andy & Daniella, 2019). Changes in trade policies have also helped in the reduction of the imbalance of bilateral trade between the US and its trading partners. Some trade policies seek to ensure that there is a reduction of trade deficits through the incorporation of trade restrictions or having administrative intervention that will seek to address any imbalances.

Long term effects of trade and tariff policies changes in the last two years

The last two years have experienced a number of impacts due to trade and tariff policies. A significant impact is the fall of the country’s GDP in the long run which could lead to offsetting of almost one-third of the long-run impact of the jobs and taxes (Andy & Daniella, 2019). Another likely long term effect of both the trade and tariff policies include a fall in wages and employment levels in the country. Some of the imposed tariffs by the Trump administration may tend to reduce the economic output income in the country, a factor that may lead to an increase in the unemployment rate. According to York (2020), the imposed tariffs are estimated to reduce long-run GDP by 0.23 percent, wages by 0.15 percent, and employment by 179,800 full-time equivalent jobs.

The effect of recent changes to trade and tariff policies on employers/employees

Businesses have significantly been affected by the current trade and tariff policies. There has been an increase in competition from other foreign multinational companies resulting in a drop in revenues, more so for small and medium enterprises in the country. There has also been a drop in the wages of employees due to increased tariffs in some sectors in the country. Some employers have had to develop measures of dealing with the changes, such as reducing the number of workers and having cut on the employee wages, among many other measures.

References

Andy, G., & Daniella, Z. (2019). U.S. Trade Policy in North America, China, and Beyond. 4 Questions for the Trump Administration. Retrieved from https://www.americanprogress.org/issues/economy/reports/2019/02/27/466705/u-s-trade-policy-north-america-china-beyond/

York, E. (2020). Tracking the Economic Impact of U.S. Tariffs and Retaliatory Actions. Retrieved from https://taxfoundation.org/tariffs-trump-trade-war/