International Trade and Policies to Solve the Problem

Running head: ECONOMICS
Economics
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ECONOMICS1
Table of Contents
Answer e..........................................................................................................................................2
Policies that can solve the problem.............................................................................................3
References........................................................................................................................................5

ECONOMICS2
Answer e
International trade benefits the countries in terms of specialization and using goods that
are unavailable in their own economy. Certain economies have an added advantage in the
production of certain goods meaning to show comparative advantage. Putting trade barriers
cannot be of any solution rather implicating ways in the role of reduction in GDP and retarding
the growth process of the country (Beverelli, Fiorini and Hoekman 2017). The government
enforces huge tariffs on foreign countries, either to earn extraordinary revenues from goods
which have immense aggregate demand in their countries or to end the overall import of that
good.
The trade war between USA and China has retarded the efficiency of demand outlook
mostly. The disastrous effect is seen on part of many products from Apple as restrictions has
caused a hike in many of its related products. To this, the USA President Mr. Donald Trump has
advised Apple not to sell goods of Apple to China and keep it bonded to America itself since
there is no requirement to give tax that lowers the market profitability (Brack 2013). However,
this is not impossible as most of the raw materials for Apple comes from Asian countries; selling
goods in the America would only limit the production level. It is advised to reduce the tariff rate
for China.
The political and educational background does not allow China to proceed with tariff
solutions. As seen in the previous chapters, the war between China and USA is likely to continue
as the President Mr. Donald Trump has announced (Brack 2013). The high tariff rate such as 200
billion dollars on Chinese good from entering into the US market posing a threat to the China’s
GDP(Gross Domestic Product) level to go down by a percent in the coming year. Oil price have