Key terms
100 free points
except if maya doesnt like you or if you say 67 then negative 400 points
Tariff
A tax on imports to make them more expensive
Government uses protection to stop workers losing jobs
Protecting local jobs
Protection keeps people employed
Protects domestic jobs
What happens to prices?
They rise because tariffs make imported goods more expensive for consumers
Multinational company
A business operating in multiple countries with a central Headquarter.
Quota
A limit on the amount of a product that can be imported
Young industries need time to grow, so they’re shielded
Infant industry protection
Tariffs give the government this
More revenue
What happens to consumer choice?
It shrinks, since fewer imported products enter the market and variety drops
Free trade
international trade with little or no government restrictions.
Embargo
A total ban on trade with a country or product
Foreign firms selling goods abroad at unfairly low prices
Dumping
Protection helps these early industries survive
Infant industries
What do other countries often do back?
They retaliate with their own tariffs, which can snowball into trade disputes or even full trade wars
Trade protection
Policies designed to shield domestic producers from foreign competition
Subsidy
Support lets local firms compete by lowering their costs.
A country limits imports so it isn’t dependent on others for essential goods
National security
Barriers can defend a country’s identity and traditions
Preserves local culture
What happens to protected domestic firms over time?
They can become inefficient because less competition removes the pressure to innovate or improve quality
Example of a government-imposed trade restriction
Tariff, quota, embargo, subsidy, forex control, quality standards, paperwork barriers.
Non-tariff barriers
These barriers block imports without using taxes e.g paperwork
Stopping foreign firms from undercutting domestic producers unfairly.
Fair competition
Protection can block unfair foreign pricing
Stops unfair trade practices
Who gets hurt internationally
Domestic exporters, because foreign countries respond with barriers that shut them out of overseas markets, making it harder for them to sell abroad and stay competitive