EvieCalifornia Politics The economy continues to thrive on a daily basis. As the world increasingly globalises, trading activities with many countries create import and exports. To regulate these trade activities, countries have established trade policies such as tariff barriers. Tariff is a tax that is placed on import and export goods, a fee that the government collects from importers of foreign goods and eventually passed along to consumers from the high prices on the collected goods. Currently, the U.S. government enforces protection on tariffs and aid domestic industry. With more regulations, the U.S. has increased tariff taxes on all imported goods. Although the United States have a stable economy, individually, it has drastically altered how businesses and consumers purchase goods.
When we think about the everyday goods that we purchase, the first thing that comes to our mind usually isn’t where the products are manufactured. Where the item came from isn’t that important. For example, walking into a store and purchasing a couple of t-shirts. All consumers think about is the shirt and the amount they paid for the item. Country of manufacturing does not come across their minds. Most consumers would assume that most goods purchased are imported and made in China, which is true. As a large percentage of most goods are imported from China, businesses in the United States prefer to do business with China due to their low cost production and higher selling value of goods. If businesses purchase goods at a cheaper value by bulk, consumers will also pay less for their goods purchased. In 2018, President Trump and its administration imposed and proposed many rounds of tariffs. These tariffs damaged economic well-beings, leading to a net loss in jobs and production, resulting in a lower level of income. According to the Tax Foundation Model, “the tariffs planned and enacted so far by the Trump administration would reduce long-run GDP by 0.12 percent ($30 billion) and wages by 0.08 percent and eliminate 94,303 full-time equivalent jobs. If the Trump administration acts on threats to place new tariffs on automobiles and parts and additional tariffs on products from China, GDP would fall by an additional 0.38 percent ($94 billion), resulting in 0.24 percent lower wages and 292,648 fewer full-time equivalent jobs.” As Trump Administration continues to act upon these changes, other countries will have the same intentions of increasing tariff taxes on exported goods. This not only cause a bigger dip in the U.S. economy, but relations between countries. Trump’s proposition on taxing Chinese imports has caused China to raises their retaliation and raised $110 billion worth in goods, while we raise ours to $200 billion. During the most recent election, this topic was vaguely discussed as President Trump will meet President Xi at the G20 Summit to discuss further actions in regards to trade tariffs. While Trump Administration has established a temporary solution for other foreign imported good tariffs, China has been one of the countries that has disagreed with Trump’s proposal. China’s retaliation on a broader economy, has affected the Republicans in the Senate reassurance on China’s cooperation. While this current issue with China will continue to be ongoing, candidates for the 2020 Presidential election have made propositions to change trade tariffs. Candidates particularly in the Democratic party have a stronger and driven motive to change these propositions to ensure better foreign relations. Many candidates have decided to void Obama’s proposal of free and open trade in 2016, but are currently working on a solution to further their campaign and chances of presidential election. As it is still early on in the presidential campaign, many candidates have not proposed anything in depth regarding trade and its tariff taxes. By November, in the attendance of both Presidents, if an agreement has not been settled in regards to the taxes on imported goods, the strained relationship between the United States and China will eventually draw a higher reinforcement between both countries. Trading will become more difficult until the next President is announced. This affects many businesses and consumers because countries require international trade of goods in order for the economy to continue to thrive. If President Trump decides to close off the United States on all imported goods like Japan, all goods and services will be distributed only throughout the United States. This would mean that prices increase drastically on all goods because we would not have as much resources than before, which means the demands would be higher while the supply is low.
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AuthorUndergraduate student generated content. Blog posting and updating done by Kristina Flores Victor, Assistant Professor of Political Science at CSUS Archives
March 2020
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