National Trade Estimate Report

Running Head : TRADE BARRIERS

Trade Barriers and Regulations : The Case of China

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Trade Barriers and Regulations : The Case of China

From 2006 to 2007 , US trade deficit with China grew from 232 .6 billion to about 256 .3 billion . In 2007 , US exports to China amounted to about 65 billion while US imports from China valued at 321 .5 billion . In to lessen this trade deficit , the US government urged the Chinese government to float ' the Chinese currency . The Chinese currency is expected to appreciate following the

implementation of the floating principle ' This will in effect reduce the overall value of Chinese exports to the United States by about a third

The indifference of the Chinese government to this issue forced the United States to bring WTO cases against China in 2007 . The United States challenged several subsidy programs that benefit a significant portion of China 's manufactured goods . Included to the subsidy programs were some of the etitive sectors of the Chinese economy . The United States also noted the existence of import quotas in selected US goods . The Chinese government also applied legal prohibitions to foreign direct investments a form of protectionist policy

The imposition of either an import quota or export subsidy will lead to a generalized deadweight loss . In the case of an export subsidy , the gainers will be the exporters . There is an incentive for exporters to increase the supply of exports in the world market . The domestic price for the export...