Analysis of Arguments For and Against U.S. Trade Protection Essay

The international trade sector of the U.S. economy continues to draw attention in economic and political circles. It is true that, the international market has become increasingly important as a source of demand for U.S. production and a source of supply for U.S. consumption. Indeed, it is substantially more important than is implied by the usual measures that relate the size of the international sector to the overall economy. This paper explores the role international trade now plays in the U.S. economy and answers the important questions for economic policy: How does international trade affect economic well-being? Who gains and who loses from free

Main protectionist policies include tariffs, quotas, embargos and voluntary export restraints, and Adam Smith’s idea of absolute advantage has been developed further to explain international trade. In recent years, protectionism has become closely related to globalization during which the influences of trades spread almost everywhere, so people insist upon the study of social deformities generated by improper policies on international trade and the task of pointing them out with a view to remedy. There are certainly both economic and political purposes of trade

Protectionism by way of the price mechanisms such as tariffs, subsides, quotas, export licences and import duties (Rugman, 2009) are just some of the measures which can seriously impact on a foreign company. For example the American steel industry was afforded protection under the Bush administration when large tariffs were imposed on foreign steel imports in order to safeguard the jobs of the national steel workers (Mankiw and Taylor, 2008).

In modern economic policy of nations and states, the tariffs a tool to tax goods and services being imported. The principal desired outcome for this tool is to create security for the domestic industry from the imported product, which may be cheaper for consumers to purchase. (McEachern, 2015)

One form of protectionism is to place limit on the amount of an incoming product. This is called

The North American Free Trade Agreement, commonly known as the NAFTA, is a trade agreement between the United States, Canada and Mexico launched to enable North America to become more competitive in the global marketplace (Amadeo, 2011). The NAFTA is regarded as “one of the most successful trade agreements in history” for its impact on increases in agricultural trade and investment among the three contracting nations (North American Free Trade Agreement, 2011). Supporters and opponents of the NAFTA have argued the effects of the agreement on participating nations since its inception; yet, close examination proves that NAFTA has had a relatively positive impact on the economies of the United States, Canada, and Mexico.

Although tariffs usually cause domestic prices to increase they can have a positive effect on our economy and specifically our domestic producers of steel and their employees. The US trade policy has historically been protectionist in nature, and congress, the principle body of power for import policy, heavily favored domestic firms over their foreign competitors (Irwin 146). As a result, domestic steel producers have had tariffs and quotas in place for many years. An effective tariff raises revenue for our US government and can help to subsidize domestic production at the expense of foreign producers. This is good because the American government receives money from foreign exporters that it would not have otherwise had access to. This money can then be used in domestic government policies and could

Superficially, restricting imports looks like an effective way of supporting an economic sector. But it biases the economy against other sectors which shouldn 't be penalized. Governments need to be armed against pressure from narrow interest groups, and the WTO system can

One of the greatest international economic debates of all time has been the issue of free trade versus protectionism. Proponents of free trade believe in opening the global market, with as few restrictions on trade as possible. Proponents of protectionism believe in concentrating on the welfare of the domestic economy by limiting the open-market policy of the United States. However, what effects does this policy have for the international market and the other respective countries in this market? The question is not as complex as it may seem. Both sides have strong opinions representing their respective viewpoints, and even the population of the United States is divided when it comes to taking a stand in

It is commonly believed that free trade between nations is a mutually beneficial arrangement for all parties involved; indeed, this is held to be an absolute truth. Though free trade is undoubtedly the most effective form of commerce between countries from a purely economic standpoint, increasingly we find that our so-called "free trade agreements" are horribly unbalanced. Indicative of these fiascoes is the North American

Managing the how goods and services enter or leave this country (import/export) is an important process that allows for us to control the economic status of our nation. Sometimes imposing tariffs on the goods imported balances our labor cost, resources and government supported industry. A tariff by definition is a tax or duty to be paid on a particular class of imports or exports.

Trade protectionism is a policy that restricts the imports of goods. The purpose of protectionism is to protect domestic industries from imports , the products coming into the country , increase exports ,products coming out the country ,and improve the countries economy . One of the most effective method of protectionism is the tariff. The tariff is a form of taxation on imports ,it increase the price of imports and is taken in the receiving country, for example if the goods coming by the sea , the tariff will be taken in the port on the country . Other forms of protectionist include five major non-tariff barriers (NTBs) such as quotas, subsidies , currency control , administrative regulation and voluntary export restrains.

In theory, high tariffs and importation quotas are beneficial to domestic economies because they reduce the competition from foreign manufacturers for domestic industry. However, the effectiveness and advisability of tariffs and quotas is severely constrained by various factors that cannot be ignored. First, the relative weakness of the U.S. dollar makes it difficult for domestic manufacturers to compete internationally. Second, the fact that other nations (such as China, most notably) artificially manipulate the value of their currency to keep their domestic manufacturing costs low undermines the value of tariffs on their goods. Third, neither tariffs nor quotas is an effective mechanism when the goods at issue are no longer even produced domestically, as in the case of many of the cheaper consumer goods that the U.S. typically imports in high volumes from foreign manufacturers. Fourth, one consequence of controlling foreign competition through tariffs and quotas is that they are usually targeted to specific foreign nations, which can simply open the door to other foreign manufacturers from other nations to whatever extent those mechanisms are effective against specific nations targeted by them.

In recent years, the US has increased tariffs on the steel industry in order to restrict

Government intervention in the trade process may be either economic or noneconomic in nature. [See Table 7.1.]