Answer to Question #192736 in Microeconomics for Narendra

Question

On January 1, 2018, China instituted their National Sword Policy. How did this policy affect U.S. exports to China?  

Answer 1

China is the country that makes the largest imports of plastic and paper waste till 2017. After that, it imposes trade restrictions on such imports by implementing a national sword policy that reduces the total amount of imports of such recyclable items.

The US is the biggest exporter of plastic and paper waste to Chine. When China imposes trade restriction on these products, there were various negative consequences faced by the US, such that:

• US exports will decrease that directly affects the economic growth of the United States.
• Trade conflicts arose between US and China
• The US started imposing import tariffs on the products that are imported from China.
• Overall international trade of the United States is negative affected by such trade restrictions by China.