What are the primary pros and cons of free trade or fair trade in the current Sino-American quagmire?

Jonah Whanau

2018-05-02 06:32:00 Wed ET

What are the primary pros and cons of free trade or fair trade in the current Sino-American quagmire? Free trade means allowing goods and services to move as freely as possible across different countries. As countries develop over time, they start swapping goods and services across national borders.  As transport improves in speed and quality, these countries start buying and selling goods and services abroad. When governments struggle to raise domestic taxes, it is easier to carry out the fair trade policy of levying heavy duties on foreign imports. Most economists eventually gain the upper hand because keeping these trade barriers as low as possible proves to be a sensible economic policy.

In accordance with the law of comparative advantage, free trade allows countries and corporations to specialize in intermediate production, service provision, or new tech innovation. Further, free trade expands the size of the economic pie and thus shifts scare resources from the less productive firms to the productive ones.

However, not everyone becomes better off. Some receive a smaller slice of the pie because product market concentration and dominance can exacerbate economic inequality. Free trade enhances the political discourse of peace and cooperation. It is important for the government to improve affordable residential real estate and labor mobility to counterbalance the exogenous shocks from fair trade barriers.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Financial institutions benefit from higher equity risk premiums and interest rate spreads.

Charlene Vos

2017-04-01 06:40:00 Saturday ET

Financial institutions benefit from higher equity risk premiums and interest rate spreads.

With the current interest rate hike, large banks and insurance companies are likely to benefit from higher equity risk premiums and interest rate spreads.

+See More

President Trump seeks to honor his campaign promise of lower U.S. medical costs by forcing higher big-pharma prices in foreign countries.

Charlene Vos

2018-05-07 07:32:00 Monday ET

President Trump seeks to honor his campaign promise of lower U.S. medical costs by forcing higher big-pharma prices in foreign countries.

President Trump seeks to honor his campaign promise of lower U.S. medical costs by forcing higher big-pharma prices in foreign countries such as Canada, Bri

+See More

The new Brexit deal can boost British pound appreciation and macroeconomic optimism.

Fiona Sydney

2019-11-13 11:34:00 Wednesday ET

The new Brexit deal can boost British pound appreciation and macroeconomic optimism.

The new Brexit deal can boost British pound appreciation and economic optimism. British prime minister Boris Johnson wins the parliamentary vote on his new

+See More

America expects to impose punitive tariffs on $7.5 billion European exports due to the recent WTO rule violation of illegal plane subsidies.

Apple Boston

2019-11-07 14:36:00 Thursday ET

America expects to impose punitive tariffs on $7.5 billion European exports due to the recent WTO rule violation of illegal plane subsidies.

America expects to impose punitive tariffs on $7.5 billion European exports due to the recent WTO rule violation of illegal plane subsidies. World Trade Org

+See More

President Trump refreshes American fiscal fears and sovereign debt concerns through the One Big Beautiful Bill Act.

Jacob Miramar

2025-06-21 05:25:00 Saturday ET

President Trump refreshes American fiscal fears and sovereign debt concerns through the One Big Beautiful Bill Act.

President Trump refreshes American fiscal fears, worries, and concerns through the One Big Beautiful Bill Act. The Congressional Budget Office (CBO) estimat

+See More

Conservative Party wins the British parliamentary majority in the general election with hefty British pound appreciation.

Jonah Whanau

2020-01-08 08:25:00 Wednesday ET

Conservative Party wins the British parliamentary majority in the general election with hefty British pound appreciation.

Conservative Party wins the British parliamentary majority in the general election with hefty British pound appreciation. In response to this general electi

+See More