Will WTO Undergo Replacement? Trade Tariff War Will Be Severe to Affect US
US, the leading overseas trader, is desirous of bringing a complete change replacing WTO to start a new trading system. The US and EU nations are collaborated to protect their business from outsiders. Donald Trump confirms the increase in the trade on products imported from China. His decision is controversial because it will be in violation of WTO trading rule. Will WTO be replaced? After the declaration of new trade tariff, economists and think tanks are reviewing the possible impact of imposition of 25 percentages of tariffs on Chinese goods. Trade tariff war starts to endanger US economy.
Measure Impact of Trump’s New Tariff on Imported Goods -WTO Needs to Be Replaced
Way back to 1980s, GATT decided to modify the rules of launching new tariffs on pharmaceutical products. However, it didn’t include services under new trade tariff. Later, for the sake of the fast expansion of American industry in the global arena, WTO put focus on tariff rates to improve the delivery of services. New Dispute Settlement Mechanism was designed by WTO. However, the rules didn’t force consumers to pay higher tariffs on imported products. Even US and EU countries were unanimous to become lenient to allow consumers to buy imported products at almost zero tariffs. Frankly speaking, if Donald Trump is agreed to add 25 percent tariffs on $35 billion worth products sold by China, he must go against the thumb of rule. He must be meticulous to go through guidelines and instructions reset by WTO. Truly speaking, trade grows depending on low margin of tariff on goods/services.
Consumers in America are aware of Trump’s official declaration over the new tariff. They believe that it will destruct the way of dealing with foreign clients. It will spoil the profile of Donald Trump who is rigid in thinking. The rise of China in world trade and commerce compels US businessmen to compete. For the protection of domestic products, Donald Trump wants to tailor a new mechanism to facilitate US companies to survive. So, his drastic steps to accelerate duty tariffs on products are certainly detrimental to China. Machinery, electrical equipment’s and chicken incubation tools are brought under this new tariff. Consumer goods are affected mildly. The innovative economic policy should be introduced to speed up the development of the domestic business.
China Improves Its Business -US and UK Losing Monopoly
Earlier, Britain and America were key leaders with massive investment in business. UK occupied important maritime zones for importing raw materials from under developing nations in Asia and Africa. So, Britain and US held monopoly in this trade. Suddenly, China’s arrival in computer application, software development, machinery and electronic components irritated US. It observed that China was selling better electronic devices at much cheaper prices. It was a devastating side effect for US to bear. China created new law for nurturing its business. Cost effective product marketing, free trading, and affordable manpower are few great options for international clients as well. Chinese market booms with bright future prospect. US must not hamper the progression of China.
On the other hand, DOHA agreement is important to overseas clients. China and other nations in ME want more product security, low tariffs and flexible immigration law to trade with US. However, Donald Trump is aggressive when he evaluates the position of China. He is determined that US will not be obedient to abide by DOHA rules to reduce the tariffs on imported goods. So, China and US will try to possess the global arena with innovative trading policies. After Brexit, May Theresa has had to concentrate on home grown products to sell. She is no longer in touch with EU. UK will not get assistance from EU communities to do free trading and business. In that case, separate market will be formed. Maybe, China will showcase its desires to invite UK to build up a bond of mutual camaraderie to suppress the counter side effect of Trump’s regime. Besides, China is trying to reinforce its diplomatic relationship with Russia and North Korea. It will also remove different sorts of obligations in trading with these countries. US may be endangered. WTO needs to be reinstalled for preventing imminent losses of billion dollars. Donald Trump must not be infatuated with the provisional success by imposing additional tariffs on foreign goods.
The reaction from China is not amazing for US financers. In retaliation to Us, China has increases tariffs on whisky and beverage products coming from US. So, retaliatory tax on imported beverage products must discourage American companies to fight back. It will weaken the trade in China. American companies will lose ground in Chinese industry. So, Donald Trump must not be arrogant to punish Chinese traders. He will have to separate his interests and personal grudge to let his country to become topper in the international market.