Sunday, July 1, 2012

Trade War Between China and U.S.

When there is war or a dispute between industrialized or developing nations, due to an increase or decrease on tariff, the most affected are the companies who depends on their daily import/export of products.

On this case, we have the example of China Chicken Market vs. U.S Car Manufacture Industry were both industries have been harmed due to a competition of gaining market share, power and revenue.
We have to understand the value of antidumping as a process that protects domestic markets. We usually see that China has mayor impact in U.S. market and this is because of a lower cost of labor of their products, and consequently, a huge increase in the final cost to U.S. consumer. This in when antidumping processes must be applied in order to protect domestic producers and consumers.

No nation can live in economic isolation; there must be a multilateral negotiation in order to reduce any percussions and increases on tariffs. Both countries, China and U.S., have an absolute advantage on their productions, and they must consider the best option for their consumers and no practices that affect internal consumption should be implemented., market share and revenue can also be obtained this way.

Where there are multilateral agreements between nations and these are respected and applied correctly without utilizing dumping actions, countries will increase their profits by taking completely absolute and/or comparative advantage of their trades.

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