Subsidies: The Impact on Our Global Market

1333 WordsJan 27, 20185 Pages
Subsidies: The impact on our global market Chinese mercantilism has not only cost the US a significant share of manufacturing job loss, but also has distorted the global location of and nature of production systems. The only real solution to the problem of Chinese mercantilism and massive industrial subsidies in particular, is for the world trading community to say enough is enough. -Robert Atkinson Subsidies by governments around the world have played a large and significant role in the production of many products and raw materials used in the global market. Several notable industries have benefited such as the solar photovoltaic production in China, farmers and automotive parts manufacuters. We will review the impact of these subsidies for the providers, recipients and consumers to determine if there are having the desired positive effect the creators are looking for or the negative impact that those that oppose state are happening and the government’s response to these subsidies. When implementing subsidies in these various markets, the governments, typically the main source of subsidies, are seen by some as acting like parents to the industries that are receiving these funds. Generally the subsidies are grants, tax breaks and trade embargoes against competing companies in foreign countries and are put into place to allow a new industry to begin to develop such as the solar, wind and alternative fuel (ethanol) energy sectors that have only in the last

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