RWE Global Flashcards
Protectionism:
Trump tariffs
25% tariffs on Chinese steel and aluminium. China retaliated and imposed tariffs on $110bn of US goods. The tariffs increased the costs of goods and lowered the competitiveness of the affected industries in both countries, causing harm to businesses, workers, and consumers on both sides.
Current account deficit:
Japan
2023
$14.43 billion in deficit
- Exports = slowing demand, especially from China
- Imports = increased, very dependent on imports of fuel and raw materials
Current account surplus:
Norway
The surplus (6.3% of GDP in 2021) has been largely driven by Norway’s natural resources, particularly its oil and gas exports. The surplus has allowed Norway to invest in and accumulate a large sovereign wealth fund worth over $1 trillion, which has helped to support the country’s economy, provided economic security and finance public spending.
Fixed exchange rate:
Hong Kong
Pegged to the US dollar. Hong Kong’s monetary policy is therefore constrained by the need to maintain the fixed exchange rate, and it cannot use interest rates to target inflation or other macroeconomic objectives. However, the stability of the Hong Kong dollar creates investor confidence and has contributed to increased international trade and investment in the city.
Weak exchange rate:
Turkish Lira
High inflation (55% in February 2023) and a large current account deficit ($5.9bn in 2022) have reduced investor confidence and has led to depreciation. Exports have become cheaper. However, Turkey is heavily reliant on imports, which have become more expensive, causing cost-push inflation.
Strong exchange rate:
Swiss Franc
The Swiss economy is very stable, attracting investors. E.g. very low inflation rates (since 2008, it has not gone above 2.4%). A large current account surplus has also contributed to the strength of the Swiss Franc.
Export subsidy Japan
$40m in export food subsidies 2022-2023
–> in 27 food goods Japan has a competitive advantage in eg. infant formula
Uk import quota
The United Kingdom increased the import quota of poultry meat from Brazil by 20.7%, from 79,900 to 96.500 tonnes per year
–> After brexit, necessity good for lower price
China import quota
China, the world’s biggest oil importer
- Increased import quota by 20%