Some Politicians, Labor Unions, And Special Interest Groups ✓ Solved

Some Politicians Labor Unions And Special Interest Groups Argue That

Some politicians, labor unions, and special interest groups argue that US trade deficits are harmful to the economy and nations that run large trade surpluses with the US are benefiting from unfair trade practices and agreements. These parties support increasing tariffs on imports, elimination, or re-writing of trade agreements. Respond to the following in a minimum of 175 words: Discuss what credible economists say about the effects that tariffs, changing trade agreements, and/or manipulating exchange rates will have on the total US trade balance. Do you agree with their assertions? Why or why not?

Sample Paper For Above instruction

The debate over tariffs, trade agreements, and exchange rate manipulation continues to dominate economic discussions, especially in the context of the US trade deficit. Credible economists largely agree that imposing tariffs can have complex impacts on the US economy and its trade balance. According to the Peterson Institute for International Economics, tariffs often lead to increased prices for consumers and businesses, which can reduce overall economic efficiency and consumer welfare (Bown, 2020). While tariffs may temporarily boost domestic industries by shielding them from foreign competition, they tend to provoke retaliatory measures from trading partners, potentially escalating tariffs and disrupting global supply chains (Irwin, 2021). Regarding trade agreements, economists like Paul Krugman argue that well-structured agreements promote specialization and efficiency, ultimately benefitting consumers through lower prices and more choices (Krugman, 2018). Manipulating exchange rates, such as through currency devaluation, may improve trade balances temporarily but can lead to inflation and a loss of confidence in the currency, harming long-term economic stability (Feldstein, 2019). I agree with mainstream economists that protectionism through tariffs can harm the broader economy over time, and that maintaining free, fair, and mutually beneficial trade policies is essential for sustainable economic growth. Short-term gains from tariffs or currency manipulation often come at the expense of long-term prosperity, emphasizing the importance of balanced trade strategies and adherence to economic principles supported by empirical research.

References

• Bown, C. P. (2020). US–China Trade War: The Economic Impact. Peterson Institute for International Economics.
• Feldstein, M. (2019). Currency values and trade balances. National Bureau of Economic Research.
• Irwin, D. A. (2021). Clashing over Commerce: A History of US Trade Policy. University of Chicago Press.
• Krugman, P. (2018). International Economics: Theory and Policy. Pearson.
• Peterson Institute for International Economics. (2020). The Impact of Tariffs on the US Economy.