POLI 330N Week 6 Assignment: Current Event – Free and Fair Trade or Budgetary Issue

Student Name

Chamberlain University

POLI-330: Political Science

Prof. Name

Date

Free and Fair Trade

Free and fair trade are essential mechanisms for maintaining sustainable economic relationships between nations. However, trade tensions, such as trade wars, can create multiple challenges, including increased costs, strained diplomatic relationships, labor disputes, and broader economic instability. This paper reviews a recent article on free and fair trade between countries, analyzes the primary trade issues, evaluates the global implications, and assesses the credibility of the source.

Article Overview

The article selected for this analysis, “Whisky Redemption: Biden Administration Lifts Hated Tariffs on Scotland’s Most Famous Export” (Croft, 2021), examines the complex trade dynamics between the United States and the European Union. The article highlights two critical trade issues: the U.S.-U.K. trade dispute and the Airbus subsidy conflict. By focusing on these matters, it offers a comprehensive perspective on the challenges and benefits of free and fair trade in the global market.

Summary of the Article

The trade dispute between the United States and the United Kingdom spanned 17 years, centering on allegations that the World Trade Organization (WTO) permitted illegal subsidies for Airbus and Boeing. Both countries imposed billions of dollars in punitive tariffs, accusing each other of unfair trade practices. The conflict notably included tariffs on U.S. goods, such as single-malt whisky, while the U.K. retaliated with tariffs on American products. The Biden administration ultimately suspended these tariffs, aiming to ease economic tensions and restore fair trade relations (Croft, 2021).

Aspect	Details
Duration of Trade Dispute	17 years
Primary Issue	Alleged illegal subsidies for Airbus and Boeing
Punitive Tariffs	U.S.: Billions on EU goods; U.K.: Retaliatory tariffs on U.S. products
Resolution Attempt	Suspension of tariffs by the Biden administration

The dispute extended beyond the U.S. and U.K., involving multiple European Union countries. Non-aerospace products, such as Italian cheese, Scottish and Irish whisky, and French wine, were affected by retaliatory tariffs. After Brexit, the U.K. suspended its retaliatory tariffs, while the U.S. lifted punitive tariffs, signaling an attempt to restore fair trade practices and negotiate settlements (Croft, 2021).

Analysis of the Issue

In 2004, the U.S. accused the EU of providing illegal subsidies to Airbus, claiming an unfair economic advantage exceeding $200 billion. The EU, however, estimated subsidies at $23 billion, primarily allocated to research and development. This disagreement prompted numerous legal cases in the WTO and led to mutual punitive tariffs: $7.6 billion from the U.S. and $4 billion from the EU.

Trade War Component	United States	European Union
Tariff Imposition	$7.6 billion	$4 billion
Key Dispute	Airbus subsidies	Boeing subsidies
Affected Goods	Cheese, whiskey, olives	Industrial and consumer products

This trade conflict had significant global repercussions. Prices of staple goods rose, business activity slowed, and transatlantic trade-dependent industries experienced economic strain. The broader impact included diminished global growth and market instability (Bie, 2021).

Importance to the Global Community

The U.S.-EU trade dispute illustrates the ripple effects of tariffs on the global market. Products unrelated to aerospace, such as food and beverages, faced price increases, disrupting supply chains. Both U.S. and EU economies suffered, and critical industries reliant on transatlantic trade were adversely affected.

The conflict also had profound consequences for farmers and producers worldwide, highlighting the interconnectedness of global trade. With the ongoing COVID-19 pandemic exacerbating economic challenges, continued trade tensions could further destabilize markets, impact employment, and disrupt supply-demand chains (Croft, 2021).

Global Implication	Explanation
Price Increases	Tariffs on unrelated goods caused higher costs for consumers
Economic Strain	Slower business activity, reduced growth
Supply Chain Disruptions	Global markets and producers affected, especially agriculture
Diplomatic Tensions	Strained relations between major trading partners

Credibility of the Source

The article was published by Fortune, a reputable media organization specializing in global business and economic reporting. The article maintains credibility by presenting factual evidence, citing official sources, and providing a neutral perspective without personal bias. Direct quotes from global leaders and industry representatives reinforce the reliability of the information.

Personal Opinion

In my perspective, suspending tariffs was a necessary and strategic move, particularly in light of the economic challenges posed by the COVID-19 pandemic. Eliminating tariffs can encourage trade, reduce consumer prices, and strengthen diplomatic relations. Additionally, it promotes ethical business practices and fairer labor conditions, as companies are less pressured to cut costs unethically (Wittig, 2021). By fostering equitable trade, both the U.S. and EU can ensure sustainable economic growth and global market stability.

References

Bie, P. (2021). Global trade war: Impact on the economy and business. World Economic Forum.

Croft, J. (2021). Whisky redemption: Biden administration lifts hated tariffs on Scotland’s most famous export. Fortune.

Janes, M. (2021). Trade tariffs and their effect on businesses. The Economist.

Wittig, T. (2021). The future of free trade post-COVID-19. Global Business Review.