ECO/535
How Trade Changes Have Affected the US economy
University of Phoenix
ECO/535
How Trade has Affected the US Economy
Trade is just one of the things that will directly affect the US economy. Trade as a whole
is beneficial to the US economy. Changes made in the past two years to the economic trade
policies can have long term effects on the overall health of the economy in areas such as job loss
and industry changes. Those changes may have long term consequences that negatively impact
the US economy.
Trade Policy
NAFTA is one of the trade agreements that have come under fire recently by the current
administration. NAFTA, North American Free Trade Agreement, was renegotiated by the
Trump administration and renamed USMCA (United States, Mexico, Canada Agreement). One
of the provisions of this agreement is that auto manufacturers must pay Mexican laborers the
same as what they would be paid in the United States. Auto manufacturers have moved their
business to Mexico because of the cheaper labor prices there. The hope was that the
manufacturers would return to the United States since that incentive was removed. Instead, the
manufactures have remained in Mexico and just raised the wages of the workers there. The cost
of moving to another location is prohibitive and hard to do. To get around this agreement, the
wages were raised and the jobs have not returned to the United States as was hoped.
Trade War with China
Trump felt that the trade deficit with China was unfair. He imposed tariffs on the
Chinese, hoping to lower the number of imports from this country. Instead, the numbers went
How Trade Changes Have Affected the US economy
University of Phoenix
ECO/535
How Trade has Affected the US Economy
Trade is just one of the things that will directly affect the US economy. Trade as a whole
is beneficial to the US economy. Changes made in the past two years to the economic trade
policies can have long term effects on the overall health of the economy in areas such as job loss
and industry changes. Those changes may have long term consequences that negatively impact
the US economy.
Trade Policy
NAFTA is one of the trade agreements that have come under fire recently by the current
administration. NAFTA, North American Free Trade Agreement, was renegotiated by the
Trump administration and renamed USMCA (United States, Mexico, Canada Agreement). One
of the provisions of this agreement is that auto manufacturers must pay Mexican laborers the
same as what they would be paid in the United States. Auto manufacturers have moved their
business to Mexico because of the cheaper labor prices there. The hope was that the
manufacturers would return to the United States since that incentive was removed. Instead, the
manufactures have remained in Mexico and just raised the wages of the workers there. The cost
of moving to another location is prohibitive and hard to do. To get around this agreement, the
wages were raised and the jobs have not returned to the United States as was hoped.
Trade War with China
Trump felt that the trade deficit with China was unfair. He imposed tariffs on the
Chinese, hoping to lower the number of imports from this country. Instead, the numbers went
