• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Commentary: China Escalates Fight over European Shoe Tariff (The New York Times)

Extracts from this document...

Introduction

In this article, trade talks between the European Union and the Chinese government have worsened around the new establishment of import duties on the import of Chinese made shoes. These protective tariffs have been put into place to protect the native European market from the high export nation, as Europe has grown concerned about China's export focused balance of trade. This is a bad sign, as this indicates very dismal trading relations between the European Union and China, two major powers on the world stage. The Chinese balance of trade, which is to say the total value of a countries imports, exports, purchase of foreign capital and sale of domestic capital is one that is tightly focused on the concept of their sale of exports. ...read more.

Middle

Currently, the Chinese government is complaining to the World Trade Organization about the removal of the protectionist tariffs. The World Trade Organization is a major advocate for free trade and thus will probably side with China after its investigation. However, the issue that has pushed the implementation of this tariff will not have been solved at all (China's ability to sell cheaper than the domestic shoe industry). Thus any agreement reached within the coming years about this situation by the World Trade Organization will benefit China, because the Chinese government is in this situation solely for the removal of trade barriers, while the European Union is trying to defend it's trade barriers. This will also impact the European shoe industry negatively, because they will see loss of business to Chinese manufacturing as they would not be used to have that level of unimpeded foreign competition. ...read more.

Conclusion

Thus China could see sometime in their near future a world pushing her into a corner to remove her exchange rate peg or be excluded from world markets. This would be ultimately detrimental to China, because of the amount of money and world market share that the nation would lose to other countries. Some of this lost share in the world will definitely move to Europe, and so the European Union collectively benefit. It is in this sense that a possible reversal in roles may be seen - Europe to a benefactor and China to a loser. In conclusion, the European tariff on shoes will elicit a Chinese response to further their own balance of trade. This response will be an aggressive push to the WTO to further the Chinese balance of trade. This will benefit the Chinese in the short term with growth in trade, but will not help in the long term by increasing European hostility. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Economics essays

  1. Economics IA Commentary - Protectionism. Title of Extract: China Expands Export Quotas with ...

    and magnesium-rare earth, which contains 2 per cent-10 per cent of rare earth elements yttrium and gadolinium and is used in the aviation, automotive and defense sectors. "Alloys like Dy-Fe alloy and terbium ferroalloy have a relatively high rare earth content, and including these alloys in the export quotas could

  2. Economics commentary - China set to introduce new rules on smoking in public

    affect their decisions as that The tobacco companies have huge influence in the whole Chinese industry, which means that banning couldn't be the correct way to solve their problem as The government operates a monopoly on tobacco sales, which brings in huge amounts of source to the government as tax

  1. US Tariff On Solar Panels

    US Firms will supply Q2 goods and overseas producers will decrease the amount they supply from Q4Q1 to Q3Q2. As a result, import expenditures will reduce from the region between Q4 and Q1 to the region between Q3 and Q2 (M), therefore correcting the country's balance of payments3.

  2. Fair Trade

    In fact tourism has become Malaysia's second largest source of income from foreign exchange, despite being threatened by water and air pollution from the growing industrial economy. The majority of these tourists come from its bordering country, Singapore. In 1999, Malaysia launched a worldwide marketing campaign called "Malaysia, Truly Asia"

  1. Economics Article Commentary - The article deals with the raise of a tariff on ...

    The US solar industry grew by 109% last year. Jigar Shah, who heads the Coalition for Affordable Solar Energy, told reporters Thursday's ruling will mean higher prices for consumers and will set back the adoption of solar. He also warned that China might retaliate against American manufacturers, sparking a trade war.

  2. 15 Historical Economic Questions on Mercatilism and the Development of European Countries.

    The existence of a monopoly in itself is enough to indicate that that nation is not allocating all of its possible resources in an efficient manner. The suppression of prospective business competitors through monopoly eliminates the potential for full resource utilization, full employment, and low costs through competition.

  1. Economics Commentary. The Independent: 'Broker' admits sale of black-market kidneys

    "I am what you call a matchmaker," Rosenbaum said in a secretly recorded conversation. "I bring a guy... I believe he's suitable for your uncle." Asked how many organs he had brokered, he said: "Quite a lot," the most recent two weeks earlier.

  2. Economics Commentary. European Union and South Korea Sign Free Trade Agreement Source of ...

    to P(world). Subsequently, the deadweight losses caused by inefficient industries are eliminated, getting rid of the burden off the consumers? hands. As EU and Korea get rid of the tariffs, there will be benefits for the consumers for several reasons.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work