Transcript Protectionism vs. Free Trade
Protectionism vs. Free Trade
Motivation • “Protectionism is the ally of isolationism, and isolationism is the Dracula of American foreign policy.” – William G Hyland
Protectionism • The idea that we should limit trade to protect our self-interest.
• A tax on imports.
Tariffs
Protective Tariffs • Tariffs used to limit international trade in order to protect a country’s own interest.
• Usually an elastic demanded product.
Revenue Tariffs • Tariffs that are used primarily to raise money for the government.
• Usually an inelastic demanded product.
Quota • A limit on the number of imports and exports.
Embargoes • When a country halts the export and import of a product or a group of products to or from another country.
Standards • A requirement that foreign goods meet a certain stiff requirement.
Subsidy • A payment made by the government to encourage some activity (opposite of a tax).
Price Ramification • Graphing the use of protectionism.