International Political Economy: Trump's Trade War

Running Head: INTERNATIONAL POLITICAL ECONOMY: TRUMP’S TRADE WAR
INTERNATIONAL POLITICAL ECONOMY: TRUMP’S TRADE WAR
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INTERNATIONAL POLITICAL ECONOMY: TRUMP’S TRADE WAR1
Executive Summary
This paper aims to study the various factors that revolves around the international trade
market from the view point of Trump’s Trade War. It looks at the various implications of
tariff rates and trade deficits that is taking a toll on the U. S. economy. The increase in the
tariff rates for the products imported from China, Europe and the other Asian nations are
affecting the economy of the U. S. as well as the global economy. The major challenges faced
by the country is the recession that shall be affecting the global economy in the long – run. It
shall not only affect international trade but also job creation and an overall economic
slowdown. The situation has been analyzed with respect to the facts and numbers, studied
across the various sources. The data has been collected from secondary sources. The paper,
concludes with an analysis of these decisions taken by the U. S. government and re-
considerations that it could make.

INTERNATIONAL POLITICAL ECONOMY: TRUMP’S TRADE WAR2
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Historical Context:.................................................................................................................4
Political and Economic Theories that has affected the developments in the current period:.5
Complications and Consequences of the economic policies undertaken by T. R. U. M. P.:. 6
Industries that got affected by the above policies:.................................................................7
Recommendation........................................................................................................................9
Conclusion................................................................................................................................10
References:...............................................................................................................................11

INTERNATIONAL POLITICAL ECONOMY: TRUMP’S TRADE WAR3
Introduction
This paper looks into the long run effect of the economic policies and the impacts of
the various economic issues that affects the welfare of the global economy. The U. S. ‘super-
power’ has inflicted a few trade wars and this has endangered the global economy as the U.
S. continues to remain as the major developmental producer of manufactured goods (Guo et
al., 2018). The trade war between the United States (henceforth, U. S.) and the other
countries, engaged in the global trade with the U. S., specifically China, has affected the
business in the U. S. However the Gross Domestic Product (henceforth, G. D. P.) for the U.
S. is still growing and unemployment levels are low, as well. Therefore, the Federal Reserve
Board continues to remain optimistic for the same. This situation in the U. S. has also led to
the Drag Effect that result in the slowdown of the world economy. It is not just China, but
also countries in the Europe, India and Rwanda have faced bigger or smaller trade wars with
the U. S. However, the U. S. President, Donald Trump, fails to stop. He is threatening his
North Atlantic Treaty Organization (henceforth, N. A. T. O.) ally Turkey as it has recently
bought Russian missiles (Barnes & Cooper, 2019). He has also placed sanctions on countries
like Iran, Venezuela and Russia. The global slowdown in the economy and the fears of
recession are not far. In this scenario, none but Trump is the only person who could be
considered for this economic downfall (BBC News, 2019).
Discussion
The paper discusses the various issues and impact of trade relations from the
perspective of the U. S. The U. S. is a developed country nation that acts as a monopoly in
the global market domain. It ends up controlling the offer curves with elasticity (e < 1),
thereby making the other developing nations to adjust to the price, based on terms of trade
where they end up in a situation of loss (Economics Discussion, 2018). Trump has
popularized the idea of increasing tariffs on the imports from the major developing countries
to aid to its development. This development strategy ensures the protection of the infant as
well as the small and new countries. The sharp decline in the exports will not help the U. S.
imports to rise. It is so because it will not only damage trade relations with the existing
countries but also hamper those with the newer countries.