International Business Management Acsenda School Of Management. International Business Management Assignment

1097 words - 5 pages

Analysis of A Current Topic
Emmanuel Ifepe (3156010)
Acsenda School of Management
Professor: Sylvain Charbonneau
BIBM101: Introduction to International Business
6th of June 2018
US slaps tariffs on EU steel and aluminium
Before I go into the topic I will talk about some terms on the topic as regards to the course contents briefly. According to chapter 3 of the course content on legal environment it talked about laws affecting international business transaction and one of the laws is through sanctions in the form of tariffs whereby taxes are being levied on either imports or exports from another country. Then In chapter 1 one of the international business activities is through exporting and importing where export deals with selling goods or services to another country for use or resale while import is buying goods or services from another country for use or resale. Furthermore, in chapter 2 it talked about global marketplaces and part of them includes the United States (US) and the European union(EU). The united states which is the world’s largest economy with $20.41 trillion in GDP currently serves as a prime market for low-income countries in terms of improving their standard of living through export development techniques. They also serve a prime market for high-income countries in terms of creating business from its large and highly educated middle class citizens. The US also has the U.S dollars and it serves as an invoicing currency whereby about half of all international transactions uses the currency in selling of goods and services while it is also serves as embodiment of foreign-currency reserve globally. The EU on the other side has 28 country members and the major goals of the bloc is to reduce barriers to trade and to enable a free market environment for its country members.
On the 1st of June this year through the US Commerce secretary, Wilbur Ross, the US finally imposed 25% on steel and 10% aluminum tariffs their imports coming from the EU. Before the decision was made finally after the last meeting between the US and EU representatives at the OECD meeting in Paris, it ended as a deadlock because the EU felt threatened by the US because they were asked to comply with the voluntary export restraints(VERs) for steel and aluminum or face the high tariffs. However, that kind of agreement is no longer accepted under the WTO, so the EU refused to agree with the US demands. Due to this reason the cost of exporting both steel and aluminum from the EU to the US increases. Based on the US point of view, the reason they imposed the tariffs was to protect the local steel and aluminum industry from a tough international competition and to resolve trade deficits. According to Donald Trump, America has been losing 800 billion dollars each year in the past few decades while 2/3 of the local steel and aluminum companies has ran out of business, 1/3 of the jobs has been l...


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