Today, free trade between countries is actively developing within the framework of globalization and the emergence of the world economy. However, this process has advantages and controversies that may cause public concern. On the one hand, it helps reduce consumer prices and increases production efficiency. Goods from China on the U.S. market “boosted the annual purchasing power of the average U.S. household” (Siripurapu & Berman, 2022, para. 10).
It contributes to economic growth by increasing exports and creating new sources of income. Finally, free trade creates jobs and alleviates poverty since exports to China have created millions of jobs in the United States. U.S. companies have generated significant profits from sales in the Chinese market (Siripurapu & Berman, 2022). However, this process has some controversial issues that need to be resolved.
While creating jobs in companies specializing in exports, free trade also reduces personnel in organizations whose goods can be replaced by imported ones. Increased market competition leads to the closure of local companies and a decline in consumer demand. In addition, the increase in demand for exported goods leads to violations of human rights, like forced labor in Xinjiang, where China is repressing millions of Uyghurs” (Siripurapu & Berman, 2022, para. 18). Second, free trade can create national security threats by forcing companies to share technology and provide access to intellectual property. Finally, it can lead to currency manipulation, where countries with weaker economies hold onto their currency for their own benefit.
Introducing tariffs on imported goods helps protect the country’s economy and limit outside influence. It reduces market competition, protects the domestic industry, and creates a new revenue source for the government budget. However, tariffs also negatively affect the local and global economy. First, it increases the cost of goods for consumers as companies seek to offset tariffs by raising prices (Siripurapu & Berman, 2022). Secondly, it may cause retaliation from trading partners, leading to export bans and negatively impacting the economy.
In conclusion, free trade has significant advantages in the context of globalization and the development of the world economy. However, trade relations between America and China demonstrate that this process is fraught with many controversies that require responses from the parties. The introduction of tariffs as a way to protect local industry can be an effective tool. However, its implementation requires careful weighing of potential benefits and threats.
Reference
Siripurapu, A. & Berman, N. (2022). The contentious U.S.-China trade relationship. Council on Foreign Relations.