preview

Unfair Trade Practices In China Case Study

Better Essays
Brendon Clair
Dr. Ruben Berrios
Econ 355, International Trade and Finance
April 30, 2015
Impact of China’s Unfair Trade Practices on the US economy
Investopedia defines unfair trade practices as “Using various deceptive, fraudulent or unethical methods to obtain business” (Investopedia). These methods include false advertising, tied selling and misrepresentation as well as other unlawful acts declared by statute. Over the past decade, the American economy has experience troubles. One of the main problems tying to the troubles over the past decade have been persistent trade deficits, most of them being with China. This trade deficit causes higher unemployment then desired by the American population. Net exports exemplify the difference between
…show more content…
China has very low labor costs when compared to the US, but this is not the only or arguably main factor. “There is a complex array of unfair trade practices, all of which are illegal under free-trade rules” (Navarro, Peter). The most noticeable of China’s array of unfair trade practices, are an abundance of export subsidies. The piracy of American technologies; the counterfeiting of brand names such as Chevy or Nike; a cunningly manipulated and wholly undervalued currency; and obligatory handover of any technology which an American company wishes to sell in the Chinese markets. The Worth Trade Organization and the US government prohibit each of these trade practices. An example being the treasury departments sanctions against manipulation of currency. In 2015, the iacc estimates the total value of global counterfeit goods to be $1.77 trillion (Counterfeiting Statistics). This is majorly detrimental to US manufacturers and causes US exports of these goods to majorly decline. China is not the only culprit, but China is rightfully known to be a major player in the counterfeit…show more content…
In this example, we looked into how unfair trade practices used by the Chinese are affecting the US trade deficit, which lowers GDP growth rates and causes the American people to lose millions of jobs every year. These unfair trade practices include; counterfeit goods being produced in China devaluing US merchandise, the manipulation of the Yuan and US dollar by the Chinese government, and the Chinese require US technologies to be submitted before being able to be sold in Chinese markets. The product of all of these unfair trade practices is the increase of exports from China into US markets, and the decrease of US exports to
Get Access