Running Head: US ECONOMICS

US ECONOMICS

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 US ECONOMICS

This paper selects three economic highlights published by the US news media. The paper

then discusses the news items selected in economic terms, creating a link between the actual

happenings and the respective economic theories and explanations.

According to the CNBC 7th May 2019, Donald Trump has threatened to raise tariffs to a

total of 25% on $575 billion in Chinese goods(Silver, 2018). The president of the United States

alluded the that his previously raised trade tariffs for Chinese imports would yet receive another

additional hike to 25%. According to the news, the president alludes that the tariff payments to

the US imposed on Chinese cargo has partially contributed to a thriving economy[ CITATION

Wil19 \l 1033 ]. This economic situation, is however a redefining moment for the US-China

trade war.

Figure 1Trump's Twitter Statement(Swanson & Tankersley, 2018)

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In essence, tariffs affect international trade, and this makes the new move by the

president a question of international trade(Silver, 2018). By raising the tariffs on Chinese

imports, the president of the US is simply discouraging trade between the two economies. This is

because higher trade tariffs raise the cost of importing, and hence discouraging local consumers

from importing goods from the targeted economy. The two trade rivals: China and the US are

now expected to engage so little in terms of trading. When US effects the new trade tariffs hinted

by Donald trump, the Chinese economy will likely raise its import tariffs hence technically

barring the trade between the two economies. Other results likely to emerge in this situation is

that the USA will benefit by protecting its local SMEs from foreign competition(Silver, 2018).

However, when China reciprocates the high trade tariffs similarly, the US will lose a portion of

its foreign currency as exports to china will be too expensive and discouraged. Nonetheless,

while free trade is not acceptable in most countries, a fair policy is crucial for the economic

wellbeing of a country.

The New York Times provides that the US unemployment rate has fallen abundantly,

reaching the least rate of 3.6% in five years now[ CITATION Irw19 \l 1033 ]. The news article

also reads that employers added 263000 jobs with an accompanying wage rise. Economically,

the employment status of the country is a result of Trump’s rough restrictive policies of

immigration to the US. By restricting immigrations, the country now has a steady volume of

workforce flowing into the country. As a result, the recent increase in employment supply

reduced unemployment rate since the supply of labor force has not increased significantly but is

rather decreasing, tending to achieve an equilibrium between employment and labor supply.

The New York Times reports that the US economy is happening as wasn’t supposed to

happen. The news website posted on May 3rd 2019 that the economy of the US is
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booming[ CITATION Irw19 \l 1033 ]. In economic terms, a booming economy implies a rise in

the GDP –Gross Domestic Product, or other similar economic indicator. This is the result of

aggregate advantageous factors in the US economy such as an increase in revenues collected as

import duty, and the rise in employment income in the economy. Since the US economy has had

these individual incomes rise in the recent years, their aggregation has also improved the overall

economic performance.

In brief, the US trade tariffs are crucial for international trade; controlling population

level is helpful in controlling unemployment; and both these are crucial in the aggregating of the

economy’s overall performance.

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References

Cummings, W. (2019, May 5). Trump proposes raising tariffs to a total of 25% on $575 billion

in Chinese goods. USA Today, p. 1. Retrieved from

https://www.usatoday.com/story/news/politics/2019/05/05/trump-proposes-massive-

increase-chinese-tariffs-tweet/1111952001/

Irwin, N. (2019, May 3). The Economy That Wasn’t Supposed to Happen: Booming Jobs, Low

Inflation. New York Times, p. 1. Retrieved from

https://www.nytimes.com/2019/05/03/upshot/unemployment-inflation-changing-

economic-fundamentals.html?rref=collection%2Ftimestopic%2FUnited%20States

%20Economy

Silver, A. (2018). US–Chinese trade war puts scientists in the cross hairs. Nature.

https://doi.org/10.1038/d41586-018-05521-2

Swanson, A., & Tankersley, J. (2018). U.S. Threatens Tariffs on $200 Billion of Chinese Goods,

From Tilapia to Handbags. The New York Times.