CAT App – TRADE – DUE OCT 19, 2020

Background:

If there were any take-away from Unit 2 that I would hope you always remember, it is that trade makes us better off. There was only one legitimate reason to go against comparative advantage, though, and that was due to National Security.

On October 2, 2020, Chinese officials issued a statement while at the World Trade Organization meetings citing that the U.S. efforts to ban downloads for services such as TikTok and WeChat violated WTO rules and agreements. For those not familiar with the situation, the US government claims that the parent organization of TikTok represents a national threat. Our government said that TikTok and similar platforms could continue growing in the US only if the parent company sold the operations of their applications to American businesses.

Prompt:

While hanging out with friends and watching silly videos on TikTok, an acquaintance comments that the app should have been banned in the US. He is one of many people that believe the parent company is collecting data on users from the U.S., and using software to spread propaganda. Although this person acknowledges that all domestic social media companies (and many of the tech companies, in general), are collecting similar information and/or are being used to spread fake information, he contends that the Chinese owned firm is worse.

To what extent do you agree with this person’s assertions? That is, what do we know about the information that is collected during our tech usage, and do you think that information in the hands of foreign countries is innately worse than when the company is owned by Americans? Should we ban the technology if the parent company refuses to sell the operations to US firms?

Are there ways we (the U.S.) could we restrict the importing of services to the US? (After all, that is the root of the Chinese counter claim – that they are providing a service.) Should we restrict such trade, specifically tech programs such as TikTok? What are the economic implications of such restrictions? Provide at least TWO approaches to restricting trade.

Note – this is a little different than previous prompts. Open with two ideas on how to restrict the trade of services / tech programs. Describe each, along with the likely economic consequences.

What are the implications of the current proposal to ban or force the sale of the operations?

Close out with a paragraph on whether or not you think we should restrict this trade.

Suppose you are responsible for making a recommendation to the President. You have several options – ban the Chinese technology, force them to sell to American firms, implement one of the two options you’ve listed, or do nothing at all. Before you make a recommendation, you decide to do a little research. What information (or types of information) would you try to find? (Note that you don’t have to actually find the information, but tell me the types of information you might seek.)