United States – China Trade Relations

Tuesday November 8, 2016 marked a new age of American politics. Donald Trump shocked the world and became the 45th President of the United States of America. The controversial businessman captivated the American public with his unconventional rhetoric and “in-your-face” campaign style. Throughout his campaign to becoming President he proposed many agendas and ideas on what he thought it would take to “make America great again.” One of his big talking to points during his campaign crusade was that he wanted to put America “first” again. Which means he essentially wants to initiate plans that benefit America first and then worry about the outside world. This was very controversial considering America has always done whatever they could to help other countries. However, Trump and his advisors believe that we as a country might be helping out others and suffering the consequences.

This idea of putting America first goes hand in hand with how he is dealing with international trade, most notably China. Donald Trump has often said that China is responsible for nearly half of our trade deficit and he believes that their government is manipulating their currency. To counter this, Donald Trump has proposed we slap a 45 percent tariff on all Chinese imports. The Trump administration says that this tariff would stem from years of China stealing jobs and manipulating the trade system. Recent studies have put the total job losses in the US associated with the Chinese at 2 million. Most of these jobs are in the manufacturing industry.

Fearing a significant tariff on their imports, China has now threatened to retaliate if these tariffs are in fact imposed. The Chinese government has relayed the message to the US government urging against these “outlandish” tariffs (McDonald). China’s Commerce Minister Zhong Shan stated that the US and China are interdependent and bilateral trade relations would have an impact on the worldwide economy. They are afraid that if things start to escalate a trade war might be imminent (McDonald).

A trade war between the US and China would have significant impact on both economies. First, if trump imposes his tariffs, China’s exports to the United States would fall around 25 percent. This means that China’s annual economic growth would decrease by as much as 1 percent. If China retaliates and imposes a tariff on the US, its economic growth would as much as a quarter percentage point (Reuters). Not to mention the consumers that would ultimately suffer. If Chinese imports get taxed, then companies would be forced to raise their prices, which would then hurt the consumer of said products. Really what this comes down to is the US trying to decrease the trade deficit with China. There are several ideas out there on how to go about this. One idea was that instead of placing a tariff on all Chinese imports, just impose targeted tariffs instead. These tariffs would be put on products that face heavy competition from Chinese imports such as steel, machinery, and auto parts. Another way to decrease the deficit would be enhance service exports to China.

Like any problem, the best to solving one is through discussion. These tensions between the US and Chinese governments are very real and very serious. The two biggest economies in the world are on the brink of a stand-off that could set both economies backwards. Sun Jiwen, spokesman for China’s Ministry of Commerce, believes that these trade tensions will resolve through much-needed dialogue. However, it might take a little more than an open invitation for Trump to join the table of discussion. Trump is playing hardball. He feels that the US has been wronged since China has joined the WTO (World Trade Organization) in 2001 (Reuters). China has said they are willing to sit down with Trump administration to come up with a plan that could benefit both nations. China’s President Xi Jinping has defended free trade on numerous occasions and stated that “no one will emerge as a winner” in an international trade war (Reuters).

These are significant times in our country. The US has always been at the forefront world leadership and it is interesting to see with this new administration how these problems will play out. Every decision has a consequence, good or bad. I hope the Trump administration weighs all of the options before irrationally making a decision. The fate of the United States economy depends on it.

The Fear of Losing Out on Both Sides: America and Outsourced Jobs

America is known throughout the world as the land of opportunity. The United States is the dream country for some people elsewhere in the world. Some countries around the world look at the U.S as a role model. America is also known as the mecca of all kinds of businesses. To cut down on costs, a lot of companies are known to manufacture elsewhere like Mexico, India, and other countries for cheaper labor. This way of operating business allows consumers to pay less for goods and services. This also helps to increase a company’s profit margin while maintaining a symbiotic relationship with the participating country.

During the campaign of Donald Trump, a lot of American people voiced their opinions towards companies that do business outside of the U.S. Some are very angry that jobs that they have relied on for years are being outsourced to other countries. Others expressed how frustrated they are over not being able to find a stable job to support their family, to live comfortably after finishing school, and to pay back student loans. To find a solution to this global issue, it’s important that we listen to each other’s worries and find a common ground that we all can benefit from.

Throughout the presidential election, Trump vowed to keep and return jobs to America from overseas. According to Patrick Gillespie in “This Mexican Mom’s Big Fear: Trump Will Take My Job,” Trump’s promise to the American people is what terrorized Hilda Roldan miles away in Mexico. She is a mother of four kids who relies on her job to take care of her family. Roldan works 60 hours a week at a textile factory in Puebla, Mexico and she looks forward to the $42 she makes to take care of her two daughters and sons. She has been working in this plant for 10 years making and folding T-shirts (Gillespie).

She is deeply frightened that Trump could take the job she relies on to feed her family. According to the Labor Department data, the United States has lost more than 100000 American workers in the textile industry. Experts believe that most of these jobs are not returning back. Returning Roldan’s job back to America is definitely going to hurt the consumers’ pockets because workers are compensated more in America (Gillespie).

Furthermore, in a world where people want a better life, people will go wherever there is a high demand for jobs, which could mean more immigrants crossing the borders illegally to find employment. Some people will not hesitate to do so in order for them to take care of their loved ones. And this will only add more problems with the current illegal immigration issues that the U. S is still finding ways to deal with. In the end, we all want the same thing, which includes a comfortable life, great paying jobs and equal opportunities.

It’s very important to find ways for companies to cut costs without excluding the American workers in the job market. A company like Wal-Mart depends on overseas manufacturing to cut costs in order to stay competitive. However, blaming foreign workers for stealing American jobs is not the right approach. Foreign workers help create more jobs which helps the economy as a whole.

It is imperative that we find a common ground where Americans will be happy to work in their home country while welcoming foreign workers who will definitely help improve the job market. America is the country where anything and everything is possible. Therefore when we come together without pointing fingers at each other and treat one another the way we want to be treated, we can definitely find a solution that can make our children and many more generations happy.

The UK Looking to Exit the EU

“Brexit”

Just after the Second World War ended, Europe was left in shambles to say the very least. Something needed to be done to ensure that this sort of thing would never happen again and to restore peace and trust between the tightknit and neighboring countries. France and Germany came up with a plan to ensure that the two countries would never go to war with each other again. Before they knew it in 1950 there were six different countries that wanted in on the deal to share coal and steel resources between them. Since then the EU has grown to 28 countries, but if all goes according to plan with “Brexit” it will soon be 27.

“Brexit” is a term that was coined combining the two words “Britain” and “exit”. Simply put, the UK wants to and is pulling out of the European Union (EU). This was brought on by several experts within the British parliament that believe that the EU was holding them back. The EU has set treaties in place that allow for less border control, less costing trade agreements, along with having a single currency to be used between the member countries.

In 2015 Britain contributed about 12.6% of the EU’s budget, which turned out to be around 8.5 billion Euros. This is the third highest total contribution, only trailing Germany’s 21.36% and France’s 15.7%. Despite being the third largest contributor to the budget, Britain is the EU’s largest trading partner.

England took a vote on Brexit and voted 53.4 to 46.6 in favor of the exit from the union. Wales also was in favor of leaving the union. Scotland and Northern Ireland were against leaving, Scotland was 62% to 38% in favor of staying and Northern Ireland was 55.8% to 44.2% in favor of staying. Since this referendum Britain got a new Prime Minister, her name is Theresa May. The old Prime Minister David Cameron was against leaving the EU, as is May. Cameron resigned from his position after he lost the referendum.

Experts believed that the removal of the UK from the European Union would cause their economy to brutally collapse, predicting housing prices to fall and a spike in unemployment. They were correct but only to a degree. The pound (Britain’s currency) took a hit after the referendum showing it to have 15% less value than the US Dollar and 10% less value than the Euro. But the foreshadowing of the impending doom was correct in that the UK’s economy has grown 1.8% in the year 2016. Inflation has grown a little as well, it has grown to 1.8% which is its highest rate for the past two plus years. Unemployment is on the decline, however, reaching a low of 4.8% which is the lowest total the UK has had in the past 11 years.

So how long will it actually take for the UK to leave the EU? When the EU was formed they wrote a rule that was intended for this exact situation. The relatively short article is titled Article 50 and spells out that the UK has two years to negotiate their removal. While it sounds very easy, the UK has to unpick over 43 years of treaties covering thousands of various topics while being a member of the EU. Also note that this has never been done before, so the negotiators on both sides will just be making this up simply because there is no precedent to follow. Until the two sides can agree on terms the UK will continue to abide by EU rules and regulations until the split is agreed upon, the UK just cannot take part in any decision making processes that take part within the union.

I personally believe that the UK will better off without their membership of the EU. With unemployment already at a staggering low and their economy slowly on the incline I believe this is only the beginning of good things to come. There are undoubtedly going to be hurdles and speed bumps that need to be surpassed and overcame before the official removal takes place in 2019, but after the obstacles are overcame I believe Britain while continue to thrive.