assignment #1 In the 16th through the 18th centuries, countries displayed a form of trade called Mercantilism. They engaged in this in order to become more dominant over another country. The idea behind this trade policy is that you continue to export to a country but you do not import anything from them. Therefore, you are selling to them and not buying from them. Over time, countries have dropped this trade policy and they realize that if they export and import from countries, then both countries will get richer and wealthier. However, does China have a trade policy of Mercantilism? If so, how do they manage this (hint - think in terms of their fixed exchange rate system) and are the Chinese consumers paying the price for this in terms of not being able to buy nice imported products? Do American consumers benefit from this policy? What will happen in the long run if we keep buying from them and they do not buy from us? Is Trump correct to put tariffs on Chinese imports, or does that just raise the price for the common American consumer? Will China change their trade policy? assighnment #2 Kimberly Amadeo defines mercantilism, “Mercantilism is an economic theory that advocates government regulation of international trade to generate wealth and strengthen national power. Merchants and the government work together to reduce the trade deficit and create a surplus. Mercantilism—a form of economic nationalism—funds corporate, military, and national growth. It advocates trade policies that protect domestic industries,” (Amadeo,2021.) Chapter 6 explains that China's rapid rise in the foreign exchange reserve is a consequence of its mercantilist policy, exporting like mad by relying on a deliberately undervalued currency, cheap labor, and foreign investors, particularly those from the United States. China is a global economic powerhouse. I believe President Trump made the correct decision by adding tariff however like many other policies it can have both pros and cons. By doing this, it makes Americans pay higher price. The purpose of tariffs was to have Americans purchase more goods from US soil rather than imported. I do not believe China will change their trade policy anytime soon. Honestly, they do not have the need to change, their policies have been working for them for years and building their economy. Every country's main goal is to gain wealth and power and China is doing just that. By the minute China is growing keeping their policy will be the wisest decision.