UK and US pull out of Saudi event over alleged murder of Jamal Khashoggi

Summary of the Article

With the recent murder of Jamal Khashoggi, many countries have decided to pull out of the forum event held in Saudi Arabia. French finance minister, Bruno Le Marie, and Dutch counterpart, Wopke Hoekstra, confirmed they were withdrawing from the event on October 23^rd. The UK trade secretary, Liam Fox, and U.S. Treasury secretary, Steven Mnuchin, have recently pulled out of the forum in Saudi Arabia. President Trump will have to make an important decision to make due to a conflict with Iran. The main part of the conflict is that any country that imports oil from Iran could be imposed with sanctions and can’t risk counter sanctions by Saudi Arabia. Saudi Arabia is an important part for the U.S. because this is our main supplier for oil and don’t want to ruin trade relations.

My take on the Article

This might hurt Saudi Arabia’s trade relations with any of the countries they have trade with previously since they are not taking this case more seriously. Since Saudi Arabia is most known for their oil, this might affect their total exports to the countries they trade with. If more countries start to pull out, the more money Saudi Arabia could lose on their exports of oil. Also, since Saudi Arabia doesn’t seem to be taking this case very seriously, it shows that this doesn’t affect them as much as other countries. This is a terrible thing because any crime committed to a journalist of any country should be taken seriously. Finally, the U.S. cannot make any bad moves with Saudi Arabia because this is a crucial trade partner. The U.S. needs to have a meeting with Saudi Arabia’s prime minister and try and get the investigation going faster to figure out who did this to Jamal Khashoggi.

Source: 

https://www.theguardian.com/world/2018/oct/18/liam-fox-pulls-out-of-saudi-event-over-alleged-of-jamal-khashoggi

Migrant Caravan Nears Southern Border

Migrant Caravan Nears Southern Border

As many people have seen on the news, a large caravan of South American migrants is encroaching on the southern border of the United States. In order to provide insights on this issue, I will offer information regarding potential courses of action from both economical and humanitarian perspectives. 

Firstly, the economic impact from the mass resettlement would be primarily felt in the area in which a majority of the migrants select to settle, for the total size of the caravan is only roughly 4,000 people. While it is assumed that they would not have a large national impact in either the U.S. or Mexico, they may have a larger impact on local economies: lower local wages, lower returns to capital, and a higher labor supply are all consequences that would become evident in the local populations that accepted the migrants. Meanwhile, the populations that previously hosted the emigrants would experience slightly higher wages, higher returns to capital, and a reduced labor supply (under the assumption that the emigrants came from concentrated communities). 

The humanitarian aspect of this crisis is important as well. The migrants come primarily from the less-developed areas of Honduras and Guatemala, and many of the emigrants do not have the training to find work in positions for highly skilled labor. The lack of applicable skills needed to find well-paying work will drive many back into the poverty that they have tried so tirelessly to escape. One of the most practical ways to help the emigrants find work is for the United Nations to invest in the industries in the migrants' home nations. By having the United Nations collect contributions from many member nations, the impact of decreasing wages and MPL's would be greatly diffused and therefore reduced to negligible levels from the donor nations, while still increasing the wages and MPL's  for workers in the receiving nations. In addition to aiding the receiving nations while not detrimenting the donor nations, aiding in investment instead of resettlement would reduce assimilation costs for the migrants and assist in keeping family groups intact.   

  

China’s record trade surplus with the US shows Trump’s strategy is “failing”

Trump recently started a trade war with China, putting large tariffs on Chinese goods in order to lower the trade deficit between the US and China. So far though, it does not seem to be working. The trade deficit is reaching record highs this year. The deficit reached 34.1 billion this September, which is 13% higher than in 2017. So it does not seem that Trump's strategy is working. In fact, China has fought Trump's tariffs by purposely exporting more into the US and importing less, making up for where the tariffs should have made a difference. Trump's tariffs are hurting Chinese economy though, the IMF predicts that the tariffs could cause a loss of growth of 2% for China in the coming years. Though China isn't the only one hurt by these tariffs. Ford reported that they lost upwards of $1 billion due to the tariffs, which will cause lay-offs. 

I think that President Trump may need to rethink his strategy. While, with time, we may see the tariffs work and the trade deficit decrease, this is not guaranteed, and so far there are no signs of it happening. In fact the trade deficit has just continued to grow. I think Trump should rethink negotiating with China in order to come to a better trade relationship so that China might export less to the US, as right now they are fighting the tariffs by exporting even more than they did to the US. Trump came out strong in this trade war, implementing very high tariffs. I think that he should have started with negotiating with china and if that did not work he may have implemented slightly lower tariffs than he has now, in order to show China he was serious, without overly angering them.

https://www.vox.com/2018/10/12/17967422/china-trade-war-us-trump-deficit

Global Business Leaders and Saudi Arabia

The disappearance of Saudi Arabian journalist, Jamal Khashoggi, has global leaders very skeptical of future dealings with the middle eastern country. So, skeptical that global leaders such as, British billionaire Richard Branson, Uber CEO Dara Khosrowshahi, and more are suspending their ties with Saudi Arabia until further investigation. Khashoggi was last seen entering the Saudi consulate in Istanbul with marriage paperwork; Khashoggi has since been missing for a week. Saudi Arabian Prince Muhammad Bin Salman has been a  tyranny to his country, with throwing protesters in jail and being suspected of having goons beat a native satirist, and now suspected of killing a native journalist. It is an unclear motive but what does this mean for Saudi Arabia's export partners? The U.S. being one of many with a 9.8% import of petroleum and petroleum products. What will happen to terms of trade and welfare of Saudi Arabia if more global leaders start to fear future dealings with middle eastern country, afraid they may disappear too? I think both terms of trade and welfare will decrease. If Saudi Arabia can't export as much then they can't afford to import as much also. In turn meaning that Saudi Arabia won't have as much consumer goods. And SA won't have as much production since SA imports machinery and equipment, textiles, chemicals, etc. at a cost of $136.8 billion dollars. Their production will decrease and so will their welfare. If the findings happen to be against SA what course of action should be taken? I don't believe global leaders will completely stop importing goods from SA but they should be held accountable. Putting tariffs and sanctions does not seem like a stiff enough punishment. Their government seems to be out of control and that's a good place to start cleaning things up.

https://abcnews.go.com/International/wireStory/richard-branson-freezes-business-ties-saudis-58454809
https://www.realclearpolitics.com/articles/2018/10/12/why_do_we_care_about_jamal_khashoggi_138334.html
https://www.economist.com/leaders/2018/10/13/what-it-means-if-saudi-arabia-murdered-a-journalist-in-turkey

NAFTA Problems with the U.S. and Canada

Summary of the Article

There was a meeting for NAFTA and it didn’t go as well as the Canadians thought it would. Trump called the relationship between him and Prime Minister Justin Trudeau “testy”. Also, NAFTA is now called U.S.M.C.A. Most of the Canadians are mad not about the name change but because of other things that Trump has said and proposed to Canada. Canada is one of the U. S’s biggest importer of their goods and biggest source of international travelers. The relationship started to take a turn when the U.S. took action stating that the tariffs on steel and aluminum would go to Canada as well. To American citizens, we don’t know how it affects the Canadian citizens but the Canadians were mad about this proposed tariff. Then in August, Trump announced a deal with Mexico on NAFTA and suggested that Canada wouldn’t be included. Trump also would hit Canada would with a 25% tariff on their car exports if they don’t “negotiate fairly”.

My Solution to the Problem

What Trump did to the Prime Minister Trudeau was wrong and shouldn't have done what he did. Instead of trying and imposing tariffs to get what Trump wants, he should be trying to come to an agreement that both Canada and the U.S. can come to terms with. Both countries right now are not going to be happy with their terms of trade and should try and work out some agreement. As of now, Trump “patched” the U.S.M.C.A but didn’t really give Canada a say in their defense and made Prime Minister Trudeau and his cabinet even more mad at President Trump. Another proposal that could be the Trudeau should have spoken about the possible export tariff and could have came to a lower export tariff (10-15%) but I don’t know if president Trump would have listened to the negotiation.