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How World Politics Affect US Economics

In a world that is divided between national boundaries, everything revolves around countries. It is evident that the politics of certain countries affect the economies of other countries. Politics is not limited to voting and selection of government personnel or president. It should be examined on a broader canvas. If we do so, we will realize that economy is the product of political decisions and ideologies.

The country's government possesses power and decides political and economic upfronts. When we talk about world politics and its effects on the US economy, we can clearly see a direct relationship between these two factors.



Impacts of Globalization

Globalization is not solely economic in nature, there may be political motives behind global trade. Overall, it has both positive and negative impacts on the US economy. However, more recently, political rivalry of the U.S. across different economic and political upfronts has cost it vastly on a global scale. It has done a great damage to the overall U.S. economy.

The gap between the United States and the rest of the world is increasing. The local and regional powers control the economic upfronts in their surroundings.



Trade war

The growing influence of China has changed the world dynamic. Now, Africa is far more dependent on the loans provided by China than ever before. China's one belt, one road initiative also contained US influence in Asian countries. China is the biggest supplier of goods and services in developing Asian countries, reducing the size of the global market for America.



Wars and conflicts

The post 9/11 era marks global politics and eliminated geopolitics. The American war of Afghanistan cost billions to the U.S. economy, which otherwise would have been used for progress, development, and investments in the U.S. and its citizens.

Political tensions may hinder or cease all the economic integration and cooperation at all levels. Trade, supply chain, investment, and mechanism transportation all depend on political relationships.

The political tensions between US and Turkey are rising. The Turkish president said that Turkey would boycott U.S. electronic products. It will undoubtedly impact the local industry.



Government policies

Another aspect is the immigration policy of the US government. US immigration policy is devised according to its political motives. In trump's presidency, the US put sanctions on the immigration of certain countries, which eventually led to the shortage of labor force in the US. Today, the situation is no different. Investors are losing millions of dollars due to this crisis, only the mushroom industry of the US is losing millions due to this issue.



Impact on the daily lives of American people

These are the ordinary people who suffer eventually. As we can see, the local farmers of Mushrooms are suffering from labor shortages and facing substantial economic losses. These losses also affect the hotel industry and export industry of the US.

In this globalized and integrated world, the effects of losses of one industry are not contained solely to itself. These losses also affect other sectors and people connected with those industries.



How tax laws and taxation policies change accordingly

Taxation is a central issue in a political economy, as it is one of the more important matters handled by the state. It provides the resources essential to run the state and its institutions, and that is why taxation and laws related to it are so important. The subject's susceptible nature also tells us why the US government is so strict in this matter.


The system of taxation depends on two main structural conditions, which are economic structure and political relations. A slight change in any of these demands, changes the tax ratio and other liabilities.

As we know, politics and the economy are interlinked, with the change in taxation policy also linked with them.



Importance of tax professionals in the everchanging situation

The changing world political situation leads to changed relations between countries, directly affecting their economic relationships. The economic and political ties change affects the country's financial condition. This financial condition may demand a modification in the taxation policies.


If you are an entrepreneur, these policies affect your business in various ways. However, you need not worry because Simpletax got you covered.

SIMPLETAX offers services such as individual tax preparation to help you file your taxes, and get you the maximum refund you deserve, and business tax preparation to boost your business' financial health by tracking income and expenses and categorizing them to increase awareness and productivity time.

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Whether you are running a small business or own a large enterprise, you need to have taxation experts to help you deal with this critical matter. Reach out to us to have a sustainable solution for all your taxation problems.

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