1.Do a little research and offer some brief comments on your perspectives on the
ID: 330940 • Letter: 1
Question
1.Do a little research and offer some brief comments on your perspectives on the implication of a trade war. 2.What must the American international company and manager, doing business in China, be aware of, if this dramatically unfolds? 3.What managerial implication might there be for American foreign nationals working in China…or Chinese in the U.S.? How might this “war” between U.S. and China effect other international companies world-wide. The overall major intent of this assignment is to consider this from a managerial or business position and not a political one…although these may be hard to separate. answer must be more than 400.
Do not answer with a picture please.
Explanation / Answer
This implies that both countries have considerable stakes involved as far as trade is concerned. Trade however is not always a zero sum game . The imports from china play a much more important role in the structure of the US economy. It turns out that China touches the supply chain of each and every major multinational corporation operating in the US. Companies have been using China as a base to optimize their supply chains. Example: Most of the electronics companies even Apple get their components from China. Any increase in the prices due to a tariff would add to costs which would either affect competiveness of these companies or ultimately get added to the Price of the product and would finally be transferred on to the US consumers.
If we see the products that US exports to China, we see that agricultural and food products like Soybeans, Cotton, Pork and wine top the list. If China imposes a tariff on these and switches over to products from other countries like Canada, Australia EU or India, this would lead to massive losses to US agriculture sector.
2> As a manager of a multinational company in the US , one would think about the implications of the rise in input costs due to tariff . A general across the board price increase might not affect companies within the US , however it will make them less competitive when selling to the rest of the world. Example an apple product made in America would cost even more to a Samsung one which isn’t made in the US. This would encourage companies to look at the probability of shifting their assembly operations outside US if they want to sell to the rest of the world and still remain competitive.
3> Foreign workers working in both countries have many factors that would affect them:
On the whole, it seem that a trade war would bring very difficult times for companies like Apple and Walmart who procure from china to gain cost advantage. It would also affect the average US consumer who will have to pay more for the same product. This will further make products ( where inputs are sourced from China) manufactured in the US more expensive to sell outside the US thereby reducing competitiveness of US based companies. Finally it would greatly affect the agriculture sector if the Chinese impose a tariff on US products and begin to buy from else where. This might not affect Chinese companies as severely as it would seem to affect US companies.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.