MACRO-ECONOMICS countries economy does a difference in the


MACRO-ECONOMICS
INDIVIDUAL ASSIGNMENT

 

Name- Aysha
Nihala

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Roll No. –
CMM048

 

President Trump imposes high tariff on a range of products
imported from China. China retaliates. Chinese currency CNY depreciates from
USD = 6.40 Yuan (23rd Jan 2018) to USD=6.90 Yuan  

 

                Trade
between the Americans and Chinese have reached about 589$ in the year of
2015,and indeed, has given a hand full of economic benefits for the united
states. Manufacturing and export of many goods ,starting from sneakers to smart
phones, has kept their prices lower that they could ever do it in America. And
recently when president trump imposed taxed on the solar panels and washing
machines, The Chinese commerce ministry took it with strong dissatisfaction . “President
Donald Trump is considering a 20% tariff on imports of steel and possibly a
number of other goods, Axios
says”.(business insider,jun,30,2017,10:24Am).Mr. President have been doing
this on regard  that this would protect
American jobs and American business. But competition from china and several
other low-wage emerging economies has definitely  hurt some employment in America. It’s vast that
united states lost at least two million jobs in between the years of 1999 and
2011 just because of the Chinese imports. The increase of tax rate  will add teeth to the president’s “America
first” foreign policy after so much months of threatening to get hard  on what trump sees as the un fair trade of
nations including china and south Korea.

                 China
has been the hub of manufacturing ,technology companies like Apple Microsoft
that specialize in hardware and software have been seeking help of china for a
very long time now. But an asses tax on goods made in china could be a push to
multinational companies for re-evaluation whether their exposure to china makes
sense or if it is time to scale back their operations. About  the tech industry, serial entrepreneur DIV
Turakhia ,the one who sold media .net in august for 900$ millions thinks that
trump will be a good news for industry in a long term.as china is the second
largest in the world economy , even the small changes in the countries economy
does a difference in the global economy.

 

               Mr.Trump
have put on the allegation that china and Russia were attempting American
security and prosperity, which seem to look like a surprise to me seeing the
past records. the increased tax rates for Chinese solar panels and washing
machines looks like a trade war.in meantime, us tax and interest rate policies
to attract the multinationals could also hit other countries in the short term
period, an the analysts of the global economy said that china will be under
pressure in both its real economy and foreign exchange controls.as its proceeding
now china should be getting ready to retaliate against trade restrictions, and
could also consider tax reforms to make the investments as of now more appealing.
President trump even wanted 716$ billion for aggressive defense strategy by the
year of 2019 to face off with china and Russia. Trade analysts have said that
trump is showing signs of becoming more confrontational, like more inclined
toward protection than Obama and bush, but still limited “by statute, economics
and politics”. according to the latest data from US census bureau, united state
computer imports from china were valued at US$40 billion in 2016 and with
computer accessories and telecommunication worth US$28 billion and
semiconductors us$8 billion.

                  

 

 

                

             Unlike
Barack Obama and George W.bush, those who had more likely attitudes towards the
multilateral trading system and its rules, as it’s seen trump has been more
assertive in invoking seldom-used unilateral trade weapons. Like section 301
which is the investigation into alleged Chinese theft of intellectual property ,or
section 232 which is national security probe on steel and aluminum imports and
a government-developed and initiated anti-dumping and anti subsidy case
targeting Chinese aluminum alloy sheets. The tariff of increased price of solar
panels and washing machine will be opening the flood gates to counterproductive
trade battles. miss anna ashton one of the director at the US-china business
council said there were three ways the us government could proceed after the
findings: a lawsuit against china with a insight to settling dispute at
the  world trade organization, begin
negotiating a solution with the Chinese government, and proceed a unilateral
sanctions against china.

 

          President
trump could do stuff to china but china will stay rigid because they already
have a good share in the global economy and the labor in America could never
come down to the prices in china, but as Mr.trump is more of a business man
than a president you never know, he might have a better and unique forecast and
a significant insight on what he is doing now.as we have to accept the fact
that America is anyways dependent on china for manufacturing and labor 

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