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

We assess almost all aspects of the current global race toward artificial general intelligence (AGI) between both the U.S. and China.

Monica McNeil

2027-10-31 00:00:00 Sunday ET

We assess almost all aspects of the current global race toward artificial general intelligence (AGI) between both the U.S. and China.

In the technological race between the U.S. and China, America leads in some strategic sectors from AI large language models (LLM), graphics processing units

+See More

Government intervention remains a major influence over global trade, finance, and technology.

Amy Hamilton

2023-08-31 10:22:00 Thursday ET

Government intervention remains a major influence over global trade, finance, and technology.

Government intervention remains a major influence over global trade, finance, and technology. Nowadays, many governments tend to eschew common ownership

+See More

AYA free finbuzz analytic report on the U.S. top tech titans FAMGA Spring-Summer 2020

Chanel Holden

2020-05-05 09:31:00 Tuesday ET

AYA free finbuzz analytic report on the U.S. top tech titans FAMGA Spring-Summer 2020

Our fintech finbuzz analytic report shines fresh light on the fundamental prospects of U.S. tech titans Facebook, Apple, Microsoft, Google, and Amazon (F.A.

+See More

We can decipher valuable lessons from the annual letters to shareholders written by Amazon CEO Jeff Bezos.

Becky Berkman

2019-07-19 18:40:00 Friday ET

We can decipher valuable lessons from the annual letters to shareholders written by Amazon CEO Jeff Bezos.

We can decipher valuable lessons from the annual letters to shareholders written by Amazon CEO Jeff Bezos. Amazon is highly customer-centric because the wor

+See More

Louis Kaplow strives to find a delicate balance between efficiency gains and redistributive taxes in the social welfare function.

Chanel Holden

2023-07-07 10:29:00 Friday ET

Louis Kaplow strives to find a delicate balance between efficiency gains and redistributive taxes in the social welfare function.

Louis Kaplow strives to find a delicate balance between efficiency gains and redistributive taxes in the social welfare function. Louis Kaplow (2010)

+See More

Central bank independence remains important for core inflation containment in the current age of political populism.

Jonah Whanau

2019-04-21 10:07:54 Sunday ET

Central bank independence remains important for core inflation containment in the current age of political populism.

Central bank independence remains important for core inflation containment in the current age of political populism. In accordance with the dual mandate of

+See More