1. The car industry represents a large chunk of UK manufacturing employment and value-added while often featuring in the news. However, trade data indicates that for the UK the value of imports of cars and intermediate car parts is higher than the corresponding value of exports. Discuss and interpret these apparently conflicting facts in the light of trade theory paying particular attention to the importance of global value chains. 2. Governments around the world actively seek to promote exports based on the premise that exports are the key source of gains from trade.
However, trade theory suggests that access to imports is at least as important. Discuss and critically assess these two contrasting views. 3. Suppose that the UK prime minister is considering introducing a number of new trade restrictions to protect a given list of UK industries. Crucially, the UK prime minister needs to anticipate the sources of support and opposition to this new policy program and asks you to help him/her in this task. Discuss and elaborate on the elements and models that you would use in order to help the UK prime minister.
4. The chart below shows the time evolution of average tariffs applied by the US on imports from China of both final and intermediate goods. Explain the general relationship between trade and tariffs. Elaborate on the likely consequences of a rise in both final and intermediate goods tariffs, while highlighting the differences between the two tariffs in their effects on the structure of US-China trade and the implications on welfare for both countries. (For the graph check the word document attached )
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