Running Head: FAIR TRADE DEAL/BUSINESS

Fair Trade Deal/Business

Student’s Name

Institution Affiliation
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Introduction

The article analysis will take about the impact of Tariffs that is supported by President Trump’s

statement. The Tariff is yet to be applied to China. The world should be ready of a different view

of trade. Rather than the normal free trade, there is a deal yet to be accepted of free trade. Most

experts consider that free trade as over the years lead to increased taxation, forgetting the fact

that there is need to incorporate less tariffs.

It is clear that Free Trade has been on the low since 2010, the United States leading

towards its removal from the international business arena. Least to understand that valuable

investors and new market entrants have failed to meet threshold in multinational business

ventures because of free trade. The tariff will open room for Small Medium Entrepreneurs

(SMEs) to invest. However, the United States review of its free trade policies to fair trade could

affect negatively their balance of trade in the long-run. The tariff could reduce and an increase of

long-term international deficit could increase.

Figure: Effect of Changes in Tariff

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Governments force tariffs to dishearten consumers from purchasing imported items by

essentially making them increasingly costly to purchase. In the graph above, you can see a Local

Demand and Local Supply curve. The World Supply curve downgrades the imported products.

The World Supply curve is flat since it is accepted that the stockpile is endless, as on the planet

can limitlessly supply this item to this one nation. The world value is P2 and at value P2, local

utilization is QD1 and creation is QS1. This point is the convergence of the world stock curve

and the neighborhood demand and nearby stockpile curve. The amount that is imported is the

contrast somewhere in the range of QD1 and QS1. With the tariff, the value becomes P1 (The

crossing point of the World Supply with Tax and the neighborhood demand and nearby inventory

curves). Local utilization diminishes to QD2 and household creation increments to QS2. The

contrast somewhere in the range of QD2 and QS2 is the sum that is imported. The contrast

between the two imported amounts is the adjustment in amount with the tariff. As should be

obvious, the economy devours a greater amount of the neighborhood great, and less is imported.

Explanation

Fair trade laws and regulations so does to policies are the reasons for the changes that are

being seen in the world when it comes to increase in balance of trade and a positive balance of

payment. During this period, it was clear that a change the policies on fair trade affected

business, however, it was positive changes and in 2014 in increased by 15%. This shows that the

trade favored not only the states or countries but also increased per capital income. Fair trade as

seen from the figure above is on gradual increased in totals sales per year. In 2016-2018. There

has been a positive change yet the biggest among all the years because more countries adopting

fair trade from free trade.

Solutions/Changes
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There are a number of ways that should take place, in terms of solutions that will increase

trade deals in the world according to president Trump. First, it is vital to consider that countries

that take part in the trade should come up better tariff in their own countries that will not only

help it towards better international and multinational trade but also boost domestic market

dominance and trade (Bodenhorn, 2019). Secondly, reduction of tariffs in the business should be

an ideal step towards opening the market for other entrants in the market (Low & Davenport,

2018). As indicated, president trump is in competition with China and want to run China out of

business in other countries in the world, this should not be the reason for taking part in fair trade,

the trade deal should be open and of best interest to all the members. Sale of services and

products in the tariff should also be coupled with restriction on what type of goods to trade or

services. Revenue collected should be shared on a common basis, to collect fund to improve the

trade.
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References

Bodenhorn, H. (2019). Laura Phillips Sawyer. American Fair Trade: Proprietary Capitalism,

Corporatism, and the “New Competition,” 1890–1940; Mary A. O’Sullivan. Dividends of

Development: Securities Markets in the History of US Capitalism, 1866–1922.

Low, W., & Davenport, E. (2018). Fair trade laws, labels and ethics. A Handbook of Food

Crime: Immoral and Illegal Practices in the Food Industry and What to Do About Them,

245.