EconomicsHow Trump’s Tariffs on Mexico are Taking Jobs from U.S. Workers

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“How Trump’s Tariffs on Mexico are Taking Jobs from U.S. Workers,” by Erica Werner & Kevin Sieff. Washington Post, July 18, 2018. https://www.washingtonpost.com/business/economy/trumps-tariffs-on-mexico-are-causing-layoffs-i (Links to an external site.) n-the-united-states/2018/07/18/03ec1e74-8473-11e8-9e80-403a221946a7_story.html (Links to an external site.) a. What is the company discussed in the article? What do they produce? Where are they located? What is the primary input to their production process? Where is that input produced? Why are Trump’s tariffs relevant to this U.S. based company? b. Drawing on the article, sketch two models of supply and demand for nails, one for each of the following events described in the article. • The construction industry booms • The cost of steel, an input in the production of nails, increases 25 percent Based on your sketches, what is the combined effect of these two events on the price of nails? On the quantity of nails sold? Aha! One of those last two questions is unanswerable without additional information. Which question has an ambiguous answer? Now look back at the article and find the factual answer to the question you can’t definitively answer. According to the article, what is the combined effect of these two events on the price of nails? On the quantity of nails sold? What can you now say about which of the two effects above had a larger effect on Mid Continent Nail Corp? c. Mid-Continent is owned by Deacero, a Mexican company. There are many companies in the U.S. that are similarly multinational – located in the United States but owned by individuals outside of the U.S. If the goal of tariffs is to protect U.S. jobs, does it matter whether the company’s ownership is domestic or international? Should the goal of policy be protecting U.S. jobs or U.S. owners of companies? Defend your position. Be sure you explicitly state what your ultimate goal is: growth, equity, stability, or efficiency. Your response should be a typed response. You can use a program such as Google Draw or Paint to make the graphs and then copy and paste the images into your report. Or you can hand-draw your graphs, take a photo with your phone, email it to yourself, and cut and paste it into your report.