Task Solutions On Lost In Manufacturing Companies ECON307

Running Head: INTERNATIONAL TRADE INFLUENCE
International Trade Influence
Name of the Student
Name of the University
Author Notes
1 INTERNATIONAL …

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Running Head: INTERNATIONAL TRADE INFLUENCE
International Trade Influence
Name of the Student
Name of the University
Author Notes
1 INTERNATIONAL TRADE INFLUENCE
Free trade agreements can be described as treaties that different countries implement
while making import or export of goods or services by regulating tariffs, taxes or duties. Free
trade in the US economy helps the country to improve the economic wellbeing of the people
by allowing them to purchase a more, quality products at a lesser price, reducing poverty
globally which will assist in decreasing child labour and pulling workers from developing
countries into ajob with improvement in working condition. (Obamawhitehouse.archives.gov,
2022). It helps in increasing the economic growth of the country for alonger period of time
by increasing production globally, increasing efficiency, innovation and greater fairness in a
rule-based system (Mercatus Center, 2022).
Gain and losses in international trade depend on the structure of the economy,
individuals and organizations ’ ability to adjust, changes in the magnitude of trade and
responses of long and short-run policy. For example, with an increase in Chinese import
penetration 1 million out of 6 million jobs were lost in manufacturing companies in the US
from 1999 to 2011 however, on the other hand, increasing export such as services have
increased jobs in other sectors during that time.
Due to the free trade economy in the US, support is provided for increasing additional
Jobs in the domestic economy as a result of which wages distribution in export-intensive
manufacturing organizations increased compared to wages distribution in non-export-
intensive manufacturing organizations. Jobs were also influenced due to the educational
attainment provided in the United States. An example can include a stable rate in
unemployment after the Great Recession and 56-month consecutive job growth in the US
economy since the day of the proclamation declaration of Nation Manufacturing Day.
Iagree with the statement that the export and import of goods and services in the US
are based on competitive advantage principles. Even though there exists anegative balance of
2 INTERNATIONAL TRADE INFLUENCE
trade in goods, there is a large availability of surplus from trade in services in the United
States this reflects a globalized competitive advantage of the country in the given sector
(Econvue, 2022).
Trade restrictions are usually imposed when importing goods or services from
different countries because it will help in protecting the workers and organization of the
domestic economy from foreign competition (Courses.lumenlearning.com, 2022).
Some of the pros and cons of trade protectionism like tariffs can include the following:
Pros
ï‚· It will help in increasing the revenues of the government.
ï‚· Help in correcting the imbalance in the price of production.
Cons
ï‚· It will limit the choice of customers since many goods are not supplied within the
domestic market.
ï‚· Those entities that are protected from foreign competition may rise in short term but
they will become less efficient in the long term
If the currency value of a country decreases at the time of revaluation, then a
competitive advantage can be enjoyed by exporting business since other countries will have
better power of purchasing. In addition, as a result of the impact on marketplaces
internationally, it will create more tensions. On the other hand, if there is currency
devaluation then it will reduce the productivity level since importing machine and capital
equipment become expensive, and it also reduces the purchasing power of the overseas
citizen.
3 INTERNATIONAL TRADE INFLUENCE
A competitive devaluation is also known as aCurrency war, it is asituation in global
affairs wherein countries wish to gain a trade advantage over others by reducing their
currency’s exchange rate in terms of another currency. As aresult of this more competitive
export can be possible and import becomes more expensive in the country. Both will benefit
the domestic industry and thus result in more employment in both foreign and domestic
markets.
Currency manipulation generally occurs when assets including bonds, and treasury
notes value become artificially high. As a result of this export to the US will become
expensive and products from foreign countries will become cheaper. It is an illegal approach
as per the rules of the International Monetary Fund but such rules are never applied
(Industryweek.com, 2022).
Thus, this essay provided abrief understanding of international trade and its influence
on the US economy.
4 INTERNATIONAL TRADE INFLUENCE
Reference
Courses.lumenlearning.com. (2022). Reading: Restrictions on International Trade |
Macroeconomics . Courses.lumenlearning.com. Retrieved 7 May 2022, from
https://courses.lumenlearning.com/suny-macroeconomics/chapter/reading-
restrictions-on-international-trade-2/.
Econvue. (2022). The U.S. Surplus in Trade in Services Reflects its Comparative Advantage .
Econvue. Retrieved 7 May 2022, from https://econvue.com/pulse/us-surplus-trade-
services-reflects-its-comparative-advantage.
Industryweek.com. (2022). The Truth about Trade Deficits and Currency Manipulation .
Industryweek.com. Retrieved 7 May 2022, from https://www.industryweek.com/the-
economy/article/21152141/the-truth-about-trade-deficits-and-currency-manipulation.
Mercatus Center. (2022). The Benefits of Free Trade: Addressing Key Myths .Mercatus
Center. Retrieved 7 May 2022, from https://www.mercatus.org/publications/trade-
and-immigration/benefits-free-trade-addressing-key-myths.
Obamawhitehouse.archives.gov. (2022). Obamawhitehouse.archives.gov. Retrieved 7 May
2022, from
https://obamawhitehouse.archives.gov/sites/default/files/docs/cea_trade_report_final_
non-embargoed_v2.pdf.

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