If a country it prone to levy tariffs on items that an organization may need, it would increase the risk of doing business while located in that company. By having a country manufacture or produce product that can be done for less elsewhere is not a wise utilization of resources and in turn harms global trade. When foreign countries can enter a home country and sell product for less, people usually see this as a great trade opportunity. However, if that product is manufactured in the home country then the home country not only loses revenue from sales on that product but the economic impacts can run even deeper. With no need to manufacture that product companies will no longer need to purchase the raw materials or hire the employees necessary to maintain the demand.
(p. 95) This is an example of how free trade can be harmful to developing countries. When consumers lose jobs they can no long afford to pay for not just luxury items but basic living expenses that other industry are selling which sends a county into economic tailspin. I propose that rich nations should be more morally accountable for manufacturing companies they have around the world. Places like Wal-Mart and the gap here in the US should be paying workers fair wages, have decent working hours, no children worker under 16, and safe working conditions. U.S companies should follow the laws we have in our own country and abide by them in others.
This happens when other countries find a better or more cost-effective way of producing the good. The people producing the good here may lose their jobs as a result. Protecting our industries in this case is not beneficial for a couple reasons. For capitalism to work, we must reward people who succeed, and punish the ones to fail. If the government doesn’t trade internationally, our industries will become lax, and will not produce the best goods for the lowest price.
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... ... middle of paper ... ...edcontent.com/article/1362775/tariffs_import_quotas_and_exchange.html?cat=3. Accessed 03/02/10  Mike Moffatt.
When the world price for a product is higher than the domestic price for the same product, then the nation should take part in international trade. In this situation the nation has a comparative advantage in the product and by increasing production and export the excess will result in greatly profits and efficiency of their resources. If the world price for a good is lower than the domestic price, consumer will be spending less their income as the product can be imported from another country for a cheaper price. The benefit of the producer of a good and the consumer of a good will be more than the costs in either scenario. Consumers will spend a greater portion of their income when there are exports of their desired good, but the increase in a producer’s profit more than compensates for any losses.
Other countries that are suitable to perform the jobs needed may demand less money to finish the jobs. The main purpose of this paper is to explain why businesses should outsource to other countries that can do the work they need at a cheaper cost. Many Americans blame outsourcing for the current unemployment rates, even though the amount of Americans on financial assistance programs that are currently unemployed and are not looking for a job is high. This paper is intended for those that blame outsourcing on the unemployment rates and for American businesses that want to provide quality goods at a reasonable cost for American consumers. This paper will inform the audience on the benefits of why businesses should outsource.
“The tariff also helps protect jobs in the industry that has eliminated the foreign competition but a negative impact is felt because it causes the consumer to pay more for a product that is imported” (Hill, 2004). If a country it prone to levy tariffs on items that an organization may need, it would increase the risk of doing business while located in that company. By having a country manufacture or produce product that can be done for less elsewhere is not a wise utilization of resources and in turn harms global trade. Tariff is a tax applied to an import and is one of the oldest trade policies in effect. This tax is generally revenue for the host country’s government.
Import controls designed to provide breathing room to a domestic industry so it can either grow or recapture its competitive position often do not work. Rather than improve the productivity of an industry, such con troll may provide it with a level of safety and a cushion of increased income, subsequently causing it to lag behind in technological advancement. One must also be aware of the corporate response to improve restrictions. Corporations faced with such restrictions can encourage their governments to erect similar barriers to protect them at home. The result is a gradually escalating set of trades’ obstacles.
Raw materials may be imported at a low tariff rate but both the nominal and effective tariff rates increase at every stage of production. Tariffs often rise with the level of processing in industrial countries. To the developing nation, it must seem it is better off not industrializing (116). • Distin... ... middle of paper ... ... deadweight loss of the tariff. If it is assumed that a nation plans for a small portion of international trade, then collecting an import tariff will lower its national welfare.
Recent trade negotiations proposed that countries convert quotas into tariffs (148-149). There is also a global quota which permits x number of goods to be imported but doesn’t restrict who or where the import comes from and a selective quota which is specific in number and country (149). Voluntary export quotas usually affect the economy much like an import quota of equal nature. The difference is they are voluntary and limit the number of exports to be sold by the exporting nation. The purpose of this quota is different from others as purpose is to moderate the international competition and allow less effective domestic producers to sell their goods that would otherwise not be sold due to cheaper and better similar products available through import.