Creating A Healthy Serving of Imports and Exports By

Creating A Healthy Serving of Imports and Exports By []James Carey President Trump has plans to bring American jobs back to the United States. In doing so he has recently started the process of renegotiating the terms of the North American Free Trade Agreement or (NAFTA) and the Trans Pacific Partnership or (TPP). NAFTA was created and put into effect in 1944. It allowed for one of the world's largest free trade zones and created a foundation for economic growth through the elimination of tariff and non-tariff barriers of entry. NAFTA governs a set of rules for trade and investment among Canada, the United States, and Mexico. The TPP is the largest regional trade agreement in history, it consists of 12 nations along the pacific rim including the United States. This trade deal is seen unfair because we are simply at a trade deficit with Mexico. We are importing more of our goods than we are exporting to Mexico. This means that we are spending more than we are making and resulting in a loss. With cheap labor in Mexico, along with the convenient location, it's hard for big companies in the U.S. to not exploit their advantage of cheap labor. Some of the potential motives behind this strategic move are that the new agreements will be in the best interest of U.S. workers and companies coming first. Another point that president Trump made was that there will be stopping of unfair imports and unfair trade practices which will be ultimately guided in the direction to lower taxes and regulations for domestic businesses. Along with lower taxation, there is an ultimate goal to reduce regulation and strain on major corporations and companies. Less regulation would allow domestic companies more room to capitalize and have growth. This would basically incentivize business to stay domesticated, rather than exporting labor to other countries in the attempt to cut costs and make more of a profit. That being said, there were definitely a significant amount of job loss that did result from NAFTA and TPP. The main reason that the majority of these companies are sending their labor overseas is simple. Companies can avoid taxes and enjoy dramatically lower wage costs due to less regulation in undeveloped countries. In turn this leads to the U.S. importing a lot more than it exports from the lack of manufacturing in-house. It is just a lot cheaper to make it elsewhere and have it imported than to actually manufacture it here in the United States. The outcome of this trade agreement renegotiation is obviously unknown because we just have to wait and see how the economy responds to it, if it does indeed happen. A major possibility is seeing an increase in goods across the boards in many markets. If the U.S. does in fact decide to drop trade agreements and raise tariffs there could certainly be repercussions. Right off the bat we can assume that the cost of buying the imported goods into the U.S. will increase due to a newly implemented tariff. Now where do you think that increased cost will be dissolved? Are companies and corporations going to take the hit on their profit margins, or are the consumer's going to be the ones that have to pay for the increased costs? On the other hand, there could be backlash from the countries in agreement with United States due to the import tariffs increasing. If Canada and Mexico end up getting hard feelings over this agreement change, they could very well do the same to us in terms of tariffs. They can raise their import tariffs which in turn would raise our domestic export tariffs. So now in this scenario, we have higher prices on goods coming in or (imports), along with higher prices of goods going out or (exports). Mexico being the top export country of U.S. grown beef, soybean meal, corn sweeteners, apples, and beans. Along with being a large destination for corn, soybeans, and oils. This butterfly effect could really hurt a lot of domestic farmers and other large companies that are major players in the exporting business. Only time will tell what will come as a result of this change, in the meantime all we can do is hope for the best. Article Source: [] Creating A Healthy Serving of Imports and Exports