International Economics Reading: IB Economics Macro IA

International Economics
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International economics is related with differential effects of the international variances on various factors that include customer base, production resources and international institutions on the economic activity. As such, it tries to explain the trends on the interactions between countries as far as investment, trade and migration are concerned (Bleischwitz, 2010). The analysis of international economics is essential since it forms a platform over which different countries can integrate and address issues such as patterns of production across countries. In this manner, countries are able to identify the areas they are strong in as far as production in concerned and the result is a sustainable world in terms of trade and investment. Chiswick & Miller (2015) asserts that international economics is essential in examining the effects of financial flows between the countries by looking at the flow of the balance of payments and the exchange rate. While countries should come together and strengthen their diplomatic ties, there are some countries whose poor relationship may affect the trade of other countries across the globe.
A recent case is when President Trump imposed tariffs on U.S imports on the solar panels and the washing machines. Particularly, Trump issued a 30% tariff on the foreign solar panels and this move aggravated not only China’s GDP but also the global trade environment (Randle, 2018). Currently, China is a global powerhouse since it produces more than 2/3 of the world’s panels. Imposing tariffs on the solar panels was a way of encouraging the local manufacturers to manufacture the panels (Aleem, 2018). Report shows that more than a dozen US panel manufacturers were forced to close their business since they were unable to compete with the producers of China. On the other hand, this will have adverse effects on the solar panel industry in China. The graph below shows the economic effects of tariffs and how it m...