Introduction
Nowadays, there is an unstable environment for the economic development of countries. In the conditions of increasing competition in the world economy, national economic interests and the vector of foreign trade policy of countries are changing. The main parts of trade and tariff policy are international organizations, the official financing system, international integration, and tariff/non-tariff regulation.
It should be noted that the growth of global instability is caused by many factors, such as geopolitical, economic, civilizational, religious, etc. The goal is to analyze current US trade and tariff policies’ benefits, costs, and results.
Tariff Regulation’s Impact
Tariff regulation is essential to the country’s economy, including many different options. One of these options is customs duties, which formulate the ability to influence imports and exports and trade volumes. Even though the United States currently has one of the lowest tariffs, this figure is high for some groups of goods. However, such an approach has ambiguous consequences, especially for US production capacities, since it causes difficulties in importing raw materials.
Moreover, as noted by Gregory Daco, an economist at Oxford Economics, the impact on the economy of such a tariff policy, while not dramatic, will only increase over time (Torry, 2023). The very system of calculating the arithmetic average customs tariff in the United States makes it possible to manipulate.
In addition, the United States has a system of tariff precedencies, including preferences concerning the least developed countries and integration partner countries. However, these agreements are based on the benefits for the US national economy; preferences cover that part of foreign exports that do not threaten American producers.
Moreover, each agreement has a list of exceptions that protects the American manufacturer. Thus, the current US tariff policy makes it possible to skillfully use tariff regulation in the national interest despite the low arithmetic average tariff (Delimatsis & Reins, 2021). It indicates a deep understanding of the economic processes in the world and a high level of specialists involved in this topic.
The Role of Lending
Moreover, lending is a crucial aspect that provides additional development opportunities. The conditions and obligations that the donor country or organization imposes on the recipient country mainly reflect the economic interests of the donor, which are expressed in the opening of the recipient market for foreign goods and capital. The US leads almost all multilateral organizations and is the largest donor, allowing for more flexible cooperation.
In addition, the United States may have a decisive voice in providing funding. The impact of lending on implementing US national interests in the economy is generally positive (Fan, 2021). Much of the aid comes in the form of tied grants for the purchase of US goods and services. It provides US producers with guarantees for the sale of their products, maintains a balance in the US food market, and prevents price destabilization.
It is also worth mentioning that transnational corporations and other large companies usually tend to create and set their standards, which are used as one of the main tools of economic competition. In particular, standards include well-defined product requirements that must be met. Manufacturers that do not comply with the requirements are excluded from the competition. It should be noted that company standards can be translated into non-tariff measures at the national, regional, or even international level.
In addition, economic integration through the current tariff and trade policy is an effective method of developing or maintaining the national economy. It also provides an opportunity for the development of international trade and the discovery of new economic options.
The impact of an import tariff on the economy of individual countries is different and depends on the country’s economic weight. As the protection of the domestic market through tariffs increases, more and more resources not explicitly dedicated to producing a given good are used to produce it. This results in greater production expenses than a nation would pay if it purchased goods from foreign providers at lower prices.
Thus, according to Katheryn Russ, associate professor of economics at the University of California, tariffs are critical for the country’s economy, and over the past two years, the new tariff policy has had a positive impact (The Economist, 2023). Moreover, it also affected international corporations; namely, it led to the development of external relations and strengthening positions in the domestic market.
Conclusion and Personal Experience
Speaking of the impact on me or my employer, recent changes in trade and tariff policies have had mixed effects. On the one hand, the company opened up new opportunities by obtaining cheaper resources from abroad. However, changes implemented at the local level will usually have repercussions, which has happened. Retaliatory tariffs in some export markets hurt the company, offsetting the gains. Moreover, the shifts in trade and tariff policies have had negative consequences in some cases, such as for my friend. As a result of the duties, there were changes in the company’s export markets and a sharp drop in demand for products, after which many were fired.
References
Delimatsis, P., & Reins, L. (2021). Trade and environmental law. Edward Elgar Publishing.
Fan, H. (2021). Tariff structure, intermediate goods, and china–U.S. trade friction. Routledge.
The Economist. (2023). The negative effects of tariffs on U.S. employment. Web.
Torry, H. (2023). Most economists see tariff effects on U.S. economy as limited. The Wall Street Journal. Web.