Bangkok – President Donald Trump has seized prices as an army to fold other countries, and in particular China, to his will when he tries to make campaign commitments to make America again large. A subject that generally occupies only the minds of economists and CEOs has been raised to the cooler conversation with water while stock market giations have suffered dollars of investment funds and workers’ retirement accounts. Despite the rapid growth of China since the 1990s, the American economy remains pre -eminent and its pricing policy is consecutive in everyone in the world.
What is a price?
A price is simply a business tax and all countries impose prices on various degrees. The importer of goods pays the rate rate and this customs income goes to the government of the country where the importer is located.
Why are the prices imposed?
Historically, prices were an important source of income for governments. This role was reduced by income and consumption taxes and because countries have gradually lowered the prices to a time of world free trade after the Second World War. Prices can be used to protect emerging or significant industries – and jobs – from competition against cheaper imports, but this can also mean higher costs for consumers and businesses, and over time, reduced prosperity in the country that largely erects such barriers. Prices can also be a foreign policy tool, used by a country to punish another for policies or behaviors that lead to its national interest.
Why is China the main target of American prices?
In a superb occurrence, Trump interrupted highly higher prices this week against dozens of countries for 90 days, but increased a trade war with China, imposing a total tariff of 145% on its exports, after Beijing retaliated with increased prices on American products. The United States has a litany of complaints concerning China’s trade and industrial policies such as subsidies that create disloyal rules, obstacles to American societies operating in China, an intellectual property and its massive trade surplus. The United States also has mixed history in some of these areas such as subsidized farmers.
The Trump administration hopes that it will be able to injure the export of the Powerhouse China and force it to the concessions. It is not without risks because China, through its purchases of bonds from the US Treasury, plays a key role in the financing of the American government, which has spent more than it has won every year since 2001. This situation has been showing a fundamental interdependence between the United States and China despite a tense relationship. The Chinese central bank receives a torrent of US dollars from the country’s exports to the United States, then beware of these dollars in US state bonds.
What are the deep trends at work?
For decades, the global economy has been organized around the principle that free trade has stimulated economic growth and prosperity as a whole. The rapid increase in living standards for hundreds of millions of Chinese from abject poverty in the 1970s is often cited as proof of this theory. In global terms, the supporters of free trade seem to be correct, but the broad point obscures the mixture of costs and advantages. In the United States, manufacturing has decreased in proportion to the economy and employment since the 1990s.
Many Americans have benefited from cheaper goods such as televisions, clothing and iPhones made in China and elsewhere in Asia, but at the cost of other Americans losing stable factory jobs. It was the United States that paved the way for the entry of China into the world economy when President Richard Nixon established diplomatic relations in 1972, ending the quarter of Beijing. The fact of Make America a great moment in American politics is one of the long -term reverberations of these seismic changes.