• 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 ...

    help the government better regulate the industry and better protect resources and the environment," the Commerce Ministry said in a statement on its website, quoting an unnamed official at the ministry's foreign trade department. Rare earths, comprising 17 elements, are usually categorized into two kinds - heavy rare earth, also

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

    receipts, also at legislation may be at the same situation of banning because some Campaigners say it is difficult to promote anti-smoking policies for the reason that china is one of the biggest suppliers and producers of cigarettes as the foreign countries franchise in china for the low labor income, (Arnold, 2007)

  1. Fair Trade

    Located on the island of Borneo, they are a preferred tourist destination for those seeking culture, nature and adventure tourism. The 150 million year old rainforests of Sarawak and Sabah are the oldest in the world and in addition are home to the richest and most diverse ecosystem of the

  2. 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.

  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.

    This is an example of the mother colony creating a negative trade deficit for one of its colonies. Mother colonies during this time period were structured on gains for the state at the expense of its colonies. The production and sales between the mother colony and its colonies was soon forbidden.

  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