Increase of Protectionism between USA and China and Modern International Business

What is it about?

The main aim of this paper is presentation the increase of protectionism between the United States and China and modern international business. The main objective of the research task is to give a comprehensive analysis of current trends in foreign trade theory and policy and in particularly the models of foreign trade policy, trade interests indicated by export orientation and import sensitivity, protectionist pressures in different political system, the level of protectionist pressures, new tendencies in international business, reasons for the USA to implement tariff sanctions. China will be significantly hurt by tariff trade war in all indicators, including welfare, gross domestic product (GDP), manufacturing employment and trade. However, it is pointed out that although there will be definite impacts on China, the costs should be maintainable and will not severely damage the Chinese economy. In regard to the United States, the simulation produced results that described, the US will gain on welfare, GDP and non-manufacturing production, but hurt employment and trade

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Photo by David Groves on Unsplash

Photo by David Groves on Unsplash

Why is it important?

It should be emphasis that free trade in itself is not responsible for economic growth, but more significant are the determining macroeconomic stability and increasing investment. The international trade in the XXI century has been strongly affected by the force of the domestic interests like in the USA under President Donald Trump’s administration with the principle America First. The changes are visible in the growing importance of international trade to national economies and domestic groups within those economies, in the closer linkages between trade and other international issues.

Perspectives