This May, president Donald Trump put tariffs on steel and aluminum, much to the disapproval of trade partners like Mexico and Canada. This was the result of a section 232 investigation, which examined the effect of the country’s imports on its national security. The article “Mexico Should Seek Tariff Exclusion Before Closing NAFTA:Steel Lobby, is relevant to free trade because these trade partners are working to renegotiate the North American Free Trade Agreement.
After President Trump placed these tariffs, Mexico and Canada placed tariffs on U.S. products. They finally announced on Monday allowing Canada to update NAFTA, which adds up to $1 trillion in annual trade between Mexico, Canada, and the U.S. The Mexican steel industry CANECERO feels that Mexico should solve the issues created by the section 232 investigation before accepting the renegotiation of NAFTA.
This article is significant because until the problems between these countries are solved, these trade relationships will still be strained. These tariff problems should be solved before Mexico renegotiates NAFTA.
Reuters. “Mexico Should Seek Tariff Exclusion Before Closing NAFTA: Steel Lobby.” The New York Times, 29 Aug. 2018, https://www.nytimes.com/reuters/2018/08/29/business/29reuters-trade-nafta-mexico-steel.html
The global economy is constantly growing and changing. Currently, the economy is being dominated by large companies and online industries. In his article “Are Superstar Firms and Amazon Effects Reshaping the Economy?”, Neil Irwin analyzes the effects of these online business and large industries. These problems are relevant because wages, growth, and inflation have remained low due to these dominating businesses.
Economists are becoming more aware of the fact that large firms and online businesses are taking over the economy. They are looking at things like “monopsony-the outsize of power of a few consolidated employers” and “the Amazon effect”, whether price swings by online retailers cause inflation. These economists also predict that wages should be rising, when in reality they are not. However, keeping interest rates low might increase worker pay. However, instead of making policy actions, economists are simply trying to understand the facts first.
This article is significant because the way that companies exert their power has a large influence on the state of the global economy. As seen in this article, large industries often result in slow investment spending and low wage growth. The concentration of these corporate powers is making it more difficult for the central banks to ensure the well being and health of the economy.
Irwin, Neil. “Are Superstar Firms and Amazon Effects Reshaping the Economy?” The New York Times, 25 Aug. 2018, https://www.nytimes.com/2018/08/25/upshot/big-corporations-influence-economy-central-bank.html