AJB/ASB 4405 – International Financial Management Assignment Sample 2024
1. Introduction
This study aims to describe a deal that has been dealt with between policymakers from the EU and the US as it concerns subsidies to the source of the airline industry. Along with this, the impact of tariff restriction on international trade which is borne by the source of domestic producers as well as consumers is also illustrated throughout this study.
2. Tariffs restrict international trade
Customs duties on the area of merchandise imports are called tariffs which give a resource of a price advantage to locally-produced goods over the aspect of similar service. A tariff is a kind of particular type of tax that the governing body imposes on services and goods leaving or entering a country such as the UK. The theoretical process showed that when a government initiates a form of tariff program, the additional cost has been saddled upon to initially impacted items that discourage imports to balance the trade.
As per the suggestion of Symes and Phillipson (2019), the trade policy of the government strongly impacts business in order to create more difficult or easier trade access to the area of international borders. In this regard, barriers are also raised in terms of trade sanctions which embargo against another country. Moreover, tariffs have been connected to be a leading cause of price or service which consumers pay for goods as it reduces the number of goods. It is making the price rate more in particular line with regards to charges by domestic producers.
It is identified that there have been three different barriers in terms of the area of international trade which are listed as language and distance barriers. As per the view of Barlow et al. (2021), non-tariff barriers, taxes on the imported services and goods, tariff barriers and major restrictions in the area of international trade. In this regard, the non-tariffs barrier within the surface of trade import quotas exchange controls, buy national regulations as well as embargoes.
Moreover, tariffs bring more than higher prices along with more revenue to the foreign producers. Import quotas merely restrict imports, preventing countries from fully realizing their comparative advantage with lowering consumer surplus. In this particular case, when a tariff of nearly $10.02 was imposed at that time the foreign exports initially cut their ultimate price by approximately $6.02 (Barlow et al. 2021).
3. Process of critically intended tariffs to restrict imports might be borne by the domestic producers and consumers
International trade raises the number of services that domestic customers ideally choose from the business operation reducing the cost of goods by raising the competition level. As opined by Dhingra et al. (2018), international trade allows domestic industries in terms of shipping products abroad. In this case, President of the U.S, Donald Trump organized a presidential campaign that was merely critical of free trade agreements.
In the year 2018, the Trump administration offered more than billions of dollars in the context of tariffs on Chinese imports as well as threatened tariffs on the area of other countries. On the other hand, Trump has effectively introduced tariffs on the U.S. imports goods, services along with pork and steel. Besides that, China has announced nearly 26.5% tariffs on $16.5 billion worth of multiple services and Chinese goods (Financial Times, 2021).
As cited by Brewster(2020), tariffs are paid by the source of domestic consumption which is not exporting to another country. However, they have been largely impacted by increasing similar prices regarding imported services.
Tariffs are merely often in terms of creating to restrict infant industries as well as developing economies although these are used by more advanced economic areas within a part of developed countries. The levying of tariffs is highly politicized which effectively increases a wider range of competition from the section of imported goods as these threaten domestic industries.
In the words of Berg (2021), protectionism in the area of the U.S. is a protectionist economic policy as it directly erects tariffs along with other barriers to the source of imported goods. On the other hand, tariffs are generally acted as a tax on service imports which is modified on consumer baseline. Along with this, tariffs are meant to protect the area of domestic industries in order to increase prices on domestic products and services of competitors (Financial Times, 2020). Tariffs have eroded competitiveness in the context of protected industries.
4. Discussing the case study
Based on the given case study information, it has been detected that resolving the last 17 years trade dispute of Boeing-Airbus in between the EU and the U.S. cheered deals to recover from the effect of coronavirus. According to the reporting data of CNBC last week, the EU has been pressing the area of the White House in terms of reaching out under a deal to end trade tariffs imposed by the Trade administration (Financial Times, 2018).
On the other hand, the historical evidence also illustrates that tariffs initially acted as the main cause to increase as well as decrease price rate based on available quantities of services and goods. In this regard, the area of the U.S. consumers as well as a business both has been resulting in lower-income along with minimizing the level of employment which lower economic output.
It has been criticized that the imposing area by the WTO is not an ideally chosen formal method in terms of imposing tariffs which is worth nearly $7.8 billion on the list of European products (Financial Times, 2020). As a proven resource data of “the Consolidated Tariff Schedules (CTS),” it can be dejected that it merely contained a premium agreement of maximum tariffs (Financial Times, 2021). The majority number of WTO members imposes on the part of imported services and products from other WTO in this case, the international database failed to be accessed outside the WTO.
5. Outline own views as consider this deal will end the 17-year-old dispute
Based on my personal point of view, it can be argued that both “theEuropean Union” as well as “the United States” have resolved a long fight of 17 years over aircraft subsidies (Financial Times, 2020). Moreover, it has also been agreed in terms of suspending tariffs in respect to five years stemming from the Boeing-Airbus Dispute (Financial Times, 2018).
Under a dealing part, in this case, both the U.S. along the E.U. has been strongly agreed for delivering development funding and research through qualitative aspects of a transparent process. However, it does not effectively provide support like tax breaks in terms of its own business producers as they can easily harm other sides. According to my own experience, it has been detected that the chosen idea usually collaborates in terms of addressing any kind of non-market practices which are conducted by another foreign country to improve its own civilian aircraft.
6. Conclusion
The entire part of the study concludes with the process of tariffs which has been actively marked as a real cause of restriction in the area of international trade. According to the given case study detail, this study critically illustrates the depth of restriction rules of international trade which is formulated under the country area of the EU.
Along with this, an own point of view is also introduced in the above section which is ideally applicable to know dealing contraction that will end old disputes of the last 17 years.
Reference list
Barlow, P., van Schalkwyk, M.C., McKee, M., Labonté, R. and Stuckler, D., 2021. COVID-19 and the collapse of global trade: building an effective public health response. The Lancet Planetary Health, 5(2), pp.e102-e107.
Berg, Z. R., 2021. How a tariff-based trade policy affects domestic prices, import volumes and, Lisbon: Nova School of Business and Economics.
Brewster, R., 2020. Gender and International Trade Policy: Economic Nostalgia and the National Security Steel Tariffs. Duke J. Gender L. &Pol’y, 27, p.59.
Dhingra, S., Freeman, R. and Mavroeidi, E., 2018. Beyond tariff reductions: what extra boost from trade agreement provisions?.
Financial Times, 2018. Tariffs are bad for GM and bad for America, London: Financial Times.
Financial Times, 2020. EU hits US goods with tariffs in Airbus-Boeing dispute, London: Financial Times.
Financial Times, 2021a. Airbus/Boeing deal explained: what is in it and what happens next, London: Financial Times.
Financial Times, 2021b. Avoiding details helped end the world’s longest-running trade dispute, London: Financial Times.
Symes, D. and Phillipson, J., 2019. ‘A sea of troubles'(2): Brexit and the UK seafood supply chain. Marine Policy, 102, pp.5-9.
Know more about UniqueSubmission’s other writing services:
