Governmental Trade

Governmental Trade Interventions Response

Response to Toya Lindsay

Good Morning Toya. According to you Toya, tariffs imposed in a country affect the price of goods and services, shipping costs and alter the competition between companies dealing with similar products from outside the country. Any business can take advantage of the tariffs imposed to tap new markets if the tariffs are imposed on imported products from the competitors since the domestic products will have lower prices. The government did not achieve the desired effect on imposing tariffs on Beijing products due to the retaliation since China being a big market for the US-made products, imposed duties on the products would lead to less uptake of the products. The unintended consequence was the retaliation by several countries including India on the consumption of almonds. This made the US government postpone more intervention to a later date. Countries across the world support the free trade area to make their companies enjoy a comparative and competitive advantage in foreign markets. The WTO facilitates negotiation of better terms between countries and economic blocks to ensure the less developed countries receive maximum benefits.

Response to Ed Hawthorne

Hello Ed Hawthorne, Businesses can take advantage of increased tariffs by the government by manufacturing more of the products that were being supplied by foreign companies to sell in the affected territories. Also, businesses can produce substitutes that will be sold in emerging markets. The products can be offered at cheaper prices. The US government failed to achieve the desired goal since India retaliated by imposing duties on the US almonds. The US companies faced backlash from foreign countries that were markets for their products resulting in the shrinking of foreign markets for Californian Almond. This compelled the delayed implementation of a further intervention to allow more room for negotiation. Governments support free trade market to improve the quality of products offered to domestic consumers and limit exploitation. The WTO plays the role of arbitration and provides a policy framework that supports improved negotiation among nations or economic blocks.