MGT530 International Business For Transportation And International Cooperation

MGT530 International Business For Transportation And International Cooperation

Read the full report and some of the Australian media coverage of its contents (refer Resources/ Assessment 1). Summarise the key findings of the report. You may also search the internet for other commentary on on the report.
2.Since publication of the report what have been the subsequent developments in the US-China trade disagreements?
3.Discuss these developments in the context of the three scenarios modelled by KPMG in its report?

Answer:
Introduction

On 28 August 2018, KPMG Australia issued a report, Trade Wars: There are no winners, on economic demonstrating of the anticipated impact of the recent US- China trade disagreements. The Chief Economist of KPMG, Brendan Rynne observed the current trade war between two countries, US and China. The consequences are evaluated even if trade stays limited or expands globally. The current US-China trade agreements intensified into an all-out global trade war can severely damage domestic and global economy. The KPMG Australia has found the new economic modelling. The involvement of the substantial number of the countries in the trade war would reduce Australian national income by almost half a trillion dollars over the ten years. It is same to the 40% of last year’s total household disposable income. The report looks at what has happened to the date along with what has been legislated and enacted.

Summarisation of KPMG

The globalization is driven by the technology, transportation and international cooperation. The economic, political and technological barriers to the international trade have collapsed globally in the recent years. The rapid globalization has lifted poverty in the emerging countries. The globalisation is composed of the trade flows between rich countries and the East Asian region (The Financial Times, 2018). The other countries like Australia have been benefited from greater integration with China. The report of KPMG comprises the subsequent development in the US-China trade agreement. The scenarios modelled by KPMG are also discussed. Both US and China are the two largest economies in the world and are instigating a mounting trade war with each other. The trade talk took place between both the countries in Washington, D.C. The discussion failed to resolve the economic tensions between US and China. The KPMG Australia represented that as the scenario progressed due to the trade between US and China, it put negative economic consequences on both the countries. The follow on impact to the global economy is also damaging (Wise, 2016).

The US-China trade agreement aimed at globalisation to merge separate national markets into one huge global market place. It is a shift towards independent world economy. The Australian producers faced competitive advantage in penetrating the Chinese market. China is largest trading partner of Australia. Australia produces many of the things which China also sources from US (Hughes & Meckling, 2017). The exports that appear on the list of US goods will get to see 15-25% tariffs (The Two-Way, 2018). The enterprises in the Australia need to gain and increase production and prices of some goods to feed China’s enormous hunger. The Australian wine exports realised an overall increase of 15% in 2017 (The Two-Way, 2018). The Australia’s single largest wine export stand to 63% with the total value of 848 million as export to China. The US exported almost $80 million cost of wine to China in 2017. The custom duties of China for the US wines are 14% and the new tariffs increased to 29%. The wines from Australia are charged 0% custom duties (The Two-Way, 2018). Australia has been marketing aggressively in China. On the other side, Australia is the biggest competitor to US for exporting fruits to China (Ludwig & Wang, 2018). According to the Australian bureau of statistics, 40% of Australia’s fruits get shipped to China and Hong Kong (The Two-Way, 2018). It is an opportunity for the Australian farmers to insert products into the global markets. China imports scrap aluminium from US which is melted and changed in Chinese furnaces. China imposed 25% tariff on the US exports. Australia has viewed its exports of waste in the form of aluminiu