Trade is a very important aspect of the world economy. Without this governmental and economic form of marketing; many nations (including the U.S.) would lose millions or even billions of dollars each year. Some third-world nations could not even survive if trade was reduced.
The U.S., China and Germany are the three most important trading nations in the world. They trade for billions of dollars with other nations. Many countries rely on these countries for finished goods, raw resources and services.
The U.S. leads the world in trade. This nation also has the ability to slow the world’s economy down when it uses high trade barrier policies. One type of high trade barrier is known as protectionism.
This is policy that requires tariffs and quotas on the amount of goods, resources and services that are to be traded throughout the world. The tariffs and quotas are designed to tax and to set limits on traded products.
Many countries fear U.S. protectionism policy because it has the ability to weaken the trade industry on a global scale. The world’s leading shipping company is known as A. P. Moeller-Maersk A/S and they are responsible for transporting at least 15% of the world’s traded products. The Chief CFO of this company states the U.S. protectionism policies are raising trade barriers which in turn will harm the world’s economy.
Starting in 2008, the U.S. has been sticking with a form of trade policy that endorses the use of protectionism. Remember, the terrible recession that rocked the nation (and the globe) back in 2008? Well, it forced the Obama Administration to tighten up on its trade policy. It was necessary for helping the world’s economy to get back on track.
The U.S.’s position as the world’s leading trading nation makes it a problem for other world economies. If this nation decides to limit its trading policy, then other countries will suffer. Many countries around the world simply cannot ignore the U.S. and turn to each other in terms of trade.
The U.S. is vested in other nations and other nations are invested within the U.S. from this regard. If a country decides to take this action, chances are they will not be able to receive the same economic benefits as they had from the U.S.
As of March 2017, President Trump has not changed any of America’s standing policies. However, he is firmly opposed against the current system. Once Trump finally gets involved; he could raise trade restrictions and enact a protectionism policy that could force many nations to tighten their belts. More information about this situation is available on Bloomberg.