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Japan Vs U.S.; Trade Wars

Following the second World War, Japan rebuilt with the help of the US, and a few other Countries. Needing to recreate business for the Country to be self-sufficient and the borders were opened to international trade commerce. This eventually lead to a new war, without guns or bombs, but dollars and yen. The war that came was not one with borders, but one with manufacturing abilities.

The building of the Commerce in Japan, was mostly due to the US subsidy. But then the US brought in a banker from Detroit, Joseph Morrell Dodge, who constructed the Dodge Plan in 1949. A liberal plan that by 1950 turned a slowly struggling rebuild into a welfare society. Where everyone was employed, and companies were subsidized by bank loans backed by the Government, which was supported by five hundred million a year from the US.

The benefit from the Dodge plan, was not as dodge planned, but high-priced product, became even more expensive. Japanese products became less favorable to consumers because of costs. And over two million workers laid off, due to the rising debt. What finally saved Japan was the Korean War. During the war, the US bought much of its supplies and equipment from Japan.

Where the Commerce wars started between the US and Japan, was in 1987 when then President Reagan charged that Japan was in violation of an agreement of August, 1986. The Agreement stated that Japan would not sell certain computer chips to third countries less than what they sold to the US. Also the Japanese Government was placing a 100% tariff on out of US goods, making them less desirable.

The US had supported Japan to join the GATT (General Agreement Trade and Tariff) and extended Most Favorable Nation Status. Followed by setting tariff policies that reduced rates on American materials and essential goods. Yet introduced barriers on Japanese goods entering the US, in 1961. In the idea to get Japan into the world market.

In today’s market, the US deals with a constant flooding by not only Japan, but many other countries. Compounded with US taxes, Union wage rates, and a slew of other issues, cannot compete with foreign prices. Another issue is that American Union products are often a lesser quality than Japanese products, but cost more. The trade war is still here, and expanded to include China and Mexico.

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