Question:
Why did Donald Trump seek to start a trade war with China when he was the President of the USA?
In your answer you should:
· Define free trade and define trade wars
· Consider the pros and cons of free trade, referring to the theory of comparative advantage
· Consider the impacts of free trade on blue collar (former manufacturing) workers over the last 40 years in the USA,
· Consider the validity of allegations made against China of unfair trade practices such as allegations that China devalued the RMB/Yuan and why China would have done this (if it did indeed do this)
· With the use of relevant economic diagrams consider the pros and cons of the USA applying trade barriers (such as but not only tariffs) on Chinese goods entering the USA
· Consider who in the USA would win and who would lose from the application of trade barriers on Chinese goods
· Consider how China has so far reacted and may continue to react to the application of trade barriers by the USA on Chinese goods