Political Economy of Trade and Trade Tariffs: The United States and China Trade Policies

Abstract

Political economy of trade policies and tariffs can affect welfare distribution and resources allocation as well as sustainable development. Political economy of trade between two countries can be affected by trade between other countries. Global trade can be affected by the bilateral trades of the countries. Impact of their bilateral trades on the global economy and global trade can be increased in case these two particular countries have big share in and influence on the global economy. Based on an in-depth literature review, this chapter aims to investigate political economy of the trade tariff and trade policies with particular focus on China’s economy, US, and China trade policies as well as their roles and impacts on global policy. Furthermore, recommendations for future trade policies and trade tariff strategies have been provided for enhancing global wealth and sustainable development. This chapter emphasizes the importance of sustainability in trade and trade policies’ roles in efficient resource allocation, welfare increase, and sustainable delvelopment. Furthermore, trade policies, taxes, and tariffs are recommended to be balanced based on the mutual trust, and common goals among trading countries. This chapter further emphasizes that trade policies need to promote ­sustainable supply globally.