Sunday, June 24, 2018

Domestic Sources of Foreign Economic Policie

         Countries can change as well, China is a labor intensive country that is becoming capital intensive, and that probably more than anything else explains Trump's posture towards China, reflecting the fact that China is becoming more of a direct competitor with the US.
        China is known as the second largest economy by nominal GDP and the world's fastest growing economy. As a result of this president Trump see china as a threat. He threatens to add tariffs on  another $200 billion  of china's goods and to start a trade war with china.
      President trump threatens to start a trade war with china and that trade war can backlash and affect the U.S stock market. U.S companies that sell or get sales due to relations with china can face higher import taxes ranging from 15 to 20 percent.  According to USA today "Wall Street fears business will slow for these firms, as their products will be more expensive for Chinese shoppers and manufacturers. That's bearish for stocks, as higher prices can lead to fewer sales and smaller profits and ultimately lower share prices." Some companies that will be greatly affected are Apple, Boeing, Caterpillar, Deere, Tesla, Borg Warner and Qualcomm.
In conclusion because these American brand companies will be greatly affected by Donald Trumps threat to start a trade war with china, it is hard and almost impossible for him to put such a threat in effect. 

No comments:

Post a Comment