Author Question: Macroeconomics (Read 359 times)

brandy.spencer · **on:** Dec 4, 2019

We have discussed international trade a few times throughout this module. Whether you realize it or not, increased tariffs and the potential for an all-out trade war with China has a big impact on all of us. What are your thoughts on this issue? Keep in mind, this is macroeconomics not political science.

Celeste · **Reply #1 on:** Dec 4, 2019

As Americans, we've become reliant on the goods produced in China. Having things produced in China and abroad allows for US customers to afford what would be otherwise expensive had it been made in America. From a consumer's standpoint, it's best that we avoid a trade war, because if one were to occur, prices of items produced there would skyrocket initially, thereby increasing the cost of living. Eventually, the prices would equalize once the government forms new relationships with other countries and plants are built elsewhere. In addition, our reliance on China has given their country an upper hand on Americans. They could easily start to trade unfairly and blackmail us in the process due to this dependency. This is why from a government's standpoint, an agreement - as opposed to a trade war - is probably the best alternative. USA wants to modify their past agreements so that fair policies can be set into places for years to come. Of course, China has gotten comfortable doing business with the USA, and are more likely to decline any modifications made to pre-existing treaties regarding trade.