Macro
MACRO 4
The audio clip concerning poultry tariffs imposed by China indicated U.S. chicken exports were reduced by 80%. For paragraph b), discuss if trade restrictions evoke retaliation and provide an example of retaliation by a trading partner. For paragraph c), explain how retaliation to a trade restriction affects the gains from trade (use statistics for before the initial tariff was instituted, right after the tariff was instituted, and right after the retaliation was instituted using.
“The Tariff, as we understand, is a tax that adds to the cost of imported items, and are much of the time made to secure infant tyke endeavors and making economies.”
“Countries may in like manner set tariffs as a striking back methodology if they envision that a trading accessory has not kept up the standards. Striking back can in like manner be used if a trading accessory clashes with the lawmaking body foreign policy. It can in like manner urge a country to reorient its economy toward choice suppliers and markets. It infers broadening business with officially unimportant trading associates.”
“The harder the consents transform into, the more they harm the all inclusive community in the retaliating country. Import constraints trigger lacks and higher prices for buyers, and toll imprisonments wipe out business for exporters. That is the reason extraordinary approvals are sporadically grasped, in light of the fact that they incite setbacks, unlawful organizations, and contamination.”
References:
WTO Sides With U.S. In Poultry Dispute With China : NPR. (n.d.). Retrieved from http://www.npr.org/2013/08/05/209097983/wto-sides-with-u-s-in-poultry-dispute-with-china
****For paragraph b), discuss if trade restrictions evoke retaliation and provide an example of retaliation by a trading partner For paragraph c), explain how retaliation to a trade restriction affects the gains from trade (use statistics for before the initial tariff was instituted, right after the tariff was instituted, and right after the retaliation was instituted using your example in paragraph b)).
Here is an example…..
b) Trade restrictions can be seen to evoke retaliation most of the time. When we do see retaliation it is mostly in the form of tariffs. An example can be seen with the sugar trade between the U.S. and Mexico. Mexico was seen to be dumping raw sugar exports on the U.S. industry, which put a hold on U.S. sugar product as it had to compete with Mexican sugar products that could go directly into use. Seeing that Mexico would find ways around the trade restrictions of dumping they tried to enforce, the U.S. then added a high tariff as retaliation on Mexican sugar products which slowed Mexican imports and forcing talks between the two countries.
c) The trade restriction made between Mexico and the U.S. saw that they would not dump as much sugar import on the U.S. as the U.S. could not make money off of the sugar made domestically. Seeing as Mexico continued to export sugar in massive quantities the U.S. then placed steep tariffs to counter the imports of sugar from Mexico. Before the tariff was introduced to the Mexico import the U.S. had a 53% limit of imported refined sugar. After tariffs were introduced the number for limit of imported refined sugar went to 15%, which was a major difference from the earlier 53%. After retaliation on the the tariffs, Mexico imports on refined sugar went to a limit of 30% which became a sort of middle ground between the two countries.
