International Economics: IB Economics

The BBC news clip looks at the ongoing trade dispute between the US and China, with a number of prominent US political figures having recently visited the country, in the hope of resolving ongoing issues, notably protectionist measures and the subsequent retaliation. 

This comes against a background of the Chinese economy slowing. 

The tit-for-tat nature of tariffs is highlighted in this BBC article that notes that the US will retaliate with a 25% tariff on selected goods if the UK introduces a digital sales tax on US tech giants. The US argues that such a tax would be "unreasonable, discriminatory, and burdensome".

Correct. But there's a fundamental difference between the two goods - in the case of the UK goods they are sold in the US and the consumer will be paying indirect taxes on such goods to the US Treasury Department. The tech giants, however, will be selling their services in the UK - such as advertising - and using tax avoidance chicanery to pay any tax in much lower tax environments. I''d like to hope that overtime the latter comes to be seen as morally, and ultimately legally, indefensible.

Proof that bullying sometimes works - in this instance, France is delaying the introduction of its digital sales tax on the big tech companies, to avoid US retaliation via the introduction of tariffs on French goods and services. 

The unilateral French action has aroused President Trump's ire: although longer-term, this issue will need to be addressed. It strikes me that the tech companies are adept at tax avoidance, and avoiding regulatory interventions, in a way which might reduce economic welfare. 

Karishma Vaswani attempts to discern a coherent strategy behind President Trump's conduct of the trade war with China. Her conclusion is that China has very few ways of getting back at the US without harming itself, and as a result it's unlikely to be able to retaliate as it might like.

More on the US-China trade war: no immediate end in sight.

Tit-for-tat.

Easy to win, apparently.

The retaliation continues: this time Turkey has responded to US tariffs by retaliating with tariffs on cars, alcohol and tobacco. Who is benefitting from these protectionist measures? 

China is going to retaliate against the latest US tariffs - and the imposition of $34bn worth of tariffs on Chinese goods is likely to be met be a forceful response.

Canadian retaliation against US steel tariffs come into effect, making most people worse-off and the odd one or two better-off. 

Great economics, Mr.President.

A little bit more on the retailiatory nature of the Chinese and EU response to American tariffs. Both are seeking to target those states that are 'Trump supporting' - a wise move, in my book.

Another - audio-visual clip looking at what tariffs are and how they affect us. A bit simplistic, but a good introduction to the issue for anyone unfamiliar with the issue. Quite how you can be, in the current climate though, I don't know.

The Guardian with an update on the US-China trade war.

I think I can help them: 'why is Donald Trump threatening more tariffs' only requires a brief answer. Because he's ...

The rest I leave to your imagination.

American tariffs are already starting to bite - Spanish olive producers are already being affected, with a marked decline in the export of black olives, and calls for retaliation. 

Presumably the tariffs were imposed on 'national security' grounds - Spanish olives being a notorious way of smuggling listening devices into the US on behalf of the EU. Which clearly implies that the EU should retailiate by imposing tariffs on Alexa.

The US and the UK have agreed to suspend retaliatory tariffs on goods such as Scotch whisky, among other things, as they seek a resolution to the ongoing Boeing-Airbus dispute. 

This is a good thing - it's estimated that the tariffs have cost the Scotch whisky industry nearly £600m in exports, with the US representing its largest export market. 

Another example of why trade wars are so damaging: in this case, it's the US and Canada at loggerheads. 

The Americans imposed a10% tariff on Canadian aluminium - note, not aluminum - and the Canadians have matched this, imposing $3.6bn tariffs on American products.

So who gains? The relative price of Canadian aluminium has risen, and as Canada's Deputy Prime Minister points out, this will affect every American who buys canned beverages, consumer appliances, bikes and cars. But at least the 30,000 or so aluminium workers will be protected.

It just doesn't stake up - perhaps the President hopes that the average American's grasp of economics is about as economically literate as he is.

The next round of the US-China trade war has seen China retaliate with another set of tariffs of US goods. 

The winners? No one. The losers? Many people. 

Here comes the retaliation.

The next round of the trade war.

Karishma Vaswani reports on how the Chinese are facing up to the latest round of US tariffs. The Chinese are looking to retaliate and their producers are simply looking at other markets.

I'm not sure what round it is, but the Chinese will retaliate if the US imposes yet more tariffs on Chinese goods.

And remember, the President himself said that a trade war was "easy to win".

Quite what anonymous senior White House officials make of this, I do not know, although they appear to want to sign letters that have been drafted for them by the President's staff in droves.

Retaliation - the name of the game as the ongoing trade war develops.

And there's more....

And so it goes - to quote the great Kurt Vonnegut - Harley Davidson appear to be on the point of looking to move some manufacturing outside of the United States in response to the EU retaliatory tariffs. 

Easy to win, apparently.

Seconds out! Round 2? 

Or is it 3? Or 4.

The US is threatening to put tariffs on EU cars in response to this week's tariffs being introduced by the EU on bourbon, jeans and Harley Davidson motorobikes. 

Oh, what a lovely war....

Let the trade war commence - the EU imposes retaliatory tariffs against the US.

What fun!

The latest on the US:China trade war and, refreshingly, it's something other than national security that's being used as a justification for tariffs. This time it's intellectual copyright theft - and arguably the Us has a point here.  

However, the next round of retaliation has also been launched - creating some speculation of a race to the bottom.