Office of Industries, U.S. International Trade Commission.(2009).Export controls: an overview of their use, economic effects, and treatment in the global trading system. Retrieved from United States International Trade Commission http://www.usitc.gov/publications/332/working_papers/ID-23.pdf
Tariffs are perhaps the most common way to restrict, or at least slightly discourage, foreign imports. Tariffs are, quite simply, taxes on imported goods. The thought behind imposing tariffs upon these goods is that it will cost more for foreign producers to sell their goods in the United States. However, the tariff is often passed down to the consumer. Even if the buyer can afford the cheaper American substitute for the product, the consumer is still robbed of fair choices between substitutes which throws off the fundamental forces of the market. Thus goes the anti-tariff argument.  Tariff-based protectionism does have its benefits, though. Due to fluctuations in currency prices, it is sometimes possible for foreign exporters to charge unnaturally low prices for their products. This is called dumping and will greatly reduce the sales of the domestic competitor. A tariff can be added to artificially raise the price of the foreign product. While this comes at the expense of consumers who wish to buy the cheapest products, it benefits American businesses and thus can indirectly benefit cons...
Because of these reasons, politicians who oppose Free Trade, feel that the U.S. should have some kind of restrictions, such as protective tariffs, import quotas, non tariff barriers, and/or export subsidies. However, some politicians and economists feel differently. They say that if some country would raise its barriers in order to reduce imports and stimulate production, the country whose exports suffer may raise its barriers, too. This would cause a trade war. The trade war would effect every nation in lower output, income, and employment; example is the Smooth-Hawley Tariff Act of 1930.
Trade restrictions that are put in place by the government on foreign products lower the standard of living for American consumers. Tariffs, quotas, and other trade barriers are the functional equivalent of a tax. It raises the cost of foreign goods and increases the price that consumers pay. The structure of trade restrictions imposes an unbalanced burden on those least able to pay. Nearly all governments limit, to some extent, the freedom of their citizens to freely trade with the citizens of other countries. The World Trade Organization (WTO) is a primary international body that is supposed to help promote free trade; however, it is very opaque and will not allow public participation, but welcomes large corporations.
When Tariffs are imposed, it can be beneficial to some parties, and costly to others. Tariffs are mainly used to protect domestic producers and employees from foreign competitors. A...
Although countries may sometimes contemplate having completely free trade, their trade policy is usually restricted using methods such as tariffs, quotas, or administrative barriers. (Sloman et al. 2015) Against the potential benefits trade might provide, one has to consider the possible costs incurred. One of the oldest and most cited arguments proposed against free trade is the protection of infant industries and key domestic industries from foreign competitors. In the US, industries such as that of steel, petroleum, automobiles, and aerospace are considered essential to the nation’s welfare in times of war, with the thought that international suppliers will not be as dependable as in times of peace. To preserve the country’s superiority, restricting foreign imports should thus be encouraged in order to stimulate development and growth. Infant industries, meanwhile, are industries that have a potential for comparative advantage, but have not yet developed the economies of scale necessary to accomplish this, lack of necessary networks, or simply financial inadequacy. Protection from foreign competition should then, accordingly, allow them the capacity for expansion and efficiency. These arguments can be considered somewhat more politic than economic, however, and a careful balance between self-sufficiency and the economic costs of foregoing trade ought be
This process of opening markets and eliminating barriers to trade has already caused quite a stir throughout the WTO’s member nations. In particular, the United States and the European Union (EU) will be at the forefront of the chopping block when it comes the time for discussions regarding agricultural trade.
No prohibition or other restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licenses or other measures, shall be instituted or maintained by any contracting party on the importation of any product of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party. [emphasis added]
Given the sizes of the European and American economies and the amount of trade between them, it is inevitable that disputes will arise. I will focus on the continuing clash over the European ban on hormone-treated beef and the recent dispute over American steel safeguard measures. These two trade disputes represent different types and different issues within the trade relationship, although both expose weaknesses in the WTO system.