Question

1. Do you believe that China is contributing to American economic problems? Explain using relevant trade theories.

PLEASE NO ANSWERS FROM OTHERS

Answer 1

China is the important trading partner of USA. USA has huge trade deficit with China. USA trade deficit with China is over the 420 billion dollar. USA is losing its jobs and employments to China.

Many issues and problem are arising due to the trade deficit. China is resorting to the ill trade practices to increase the export to rest of world. The china is keeping it's currency undervalued. The currency is artificially low in the value. Such depreciation would cause the net export to rise at the expanse of trading partners. USA , however , follow market forces fully.

Thus, here the china is causing economic hardships to USA. Government must take action to reduce the trade deficit with China.