ipl-logo

Methods Of Protectionism

1905 Words8 Pages

Protectionism refers to economic concept that is caused by government’s actions and policies to restrict international trade in the country. This is done in order to protect national companies from foreign competition thus promoting domestic business and keeping job places for local people. The main methods of protectionism are tariffs and quotas on imported goods, tax cut and subsidies to local businesses. All of these measures are not only for protecting but also for encouraging domestic business and creating competition within other local companies without having to compete with stronger foreign competition.
Main methods of protectionism:
• Tariffs are simply taxes put on product when it crosses national boundaries. The most widespread tariff …show more content…

The main argument is that the government should help these new industries to compete against stronger, more experienced foreign companies. Infant industries needs money and time to develop needed technology to be able to compete with foreign firms. Government by providing subsidies could help to achieve their goal faster and to survive in the market. However, Governments must make correct decisions about which industries to protect, while protection itself weakens incentives for companies to innovate and become efficient. Moreover, the companies could just be asking subsidies from government and not be able to become competitive and thus experience financial loss for both company and …show more content…

These costs include the losses of consumer surplus because of higher prices and the resulting deadweight losses as import volume is reduced, lost economies of scale as opportunities for further trade are foregone, and the loss of incentives for technological development because of the pressure of import competition (Carbaugh, 2009). So if the government realizes that the cost of protectionist policies are going to increase the cost to society, the more likely that the policies would not be implemented. This is another disadvantage that the protectionism could cause to society, compared to free trade. Moreover, the industry which uses imported materials for production also have to pay more because of the implemented tariffs. That is why the cost to manufacture a product increase. People will have to pay more and it will increase the living

Show More
Related

  • Compare And Contrast Hamilton And The Federalists

    314 Words  | 2 Pages

    Protective tariffs are a high tax put on imports proposed by Alexander Hamilton. They also wanted to form alliances with the British because they like the stability British had. Even more,

    Read More

  • The Monopoly Of Oil In The 1800's

    502 Words  | 3 Pages

    This leads to consumers looking for cheaper substitutes for the product from other companies. Not only that, but with no competition, the value may go down if the prices are too high or too low. The consumer may not have the resources to purchase any other brand of the same product, but is forced to only purchase from the first company it came from. When the prices of oil go sky high, those who live in poverty may have to use every dime, nickle and penny that they have just so they can have the oil they need. It gives those who are struggling more pressure and tribulation.

    Read More

  • Common Sense By Thomas Paine: An Argument For American Independence

    208 Words  | 1 Pages

    (98). For instance, Britain was only concerned about protection when it benefited on their account. America was forced to fight in Britain's wars, creating new unnecessary enemies. When war comes around America's trade is punished because of the connection with Britain.

    Read More

  • Which Industries Are More Heavily Protected In The United States And Japan?

    315 Words  | 2 Pages

    1. Which industries are more heavily protected in the United States and Japan? Are high-income or low-income nations more affected by American and Japanese trade barriers? Explain.

    Read More

  • How Did The Great Depression Affect The Economy In The 1930s

    987 Words  | 4 Pages

    In response to the recession, Protectionism, a policy in which the competition from foreign trade is

    Read More

  • The Conflict Between Republicans And Democrats In The Late 19th Century

    1914 Words  | 8 Pages

    Tariffs brought significant amounts of revenue from imported goods to the United States government. However, a debate began on what an appropriate level of tariff would be. Others pushed for low tariffs to promote free trade and decrease consumer costs, while some economists called for high tariffs to protect U.S. industry. High tariffs became advocated on the grounds that they would promote local manufacturing and industry and help shield American businesses from foreign competition. Additionally, they thought that tariffs were essential to safeguard American workers from being undercut by cheap foreign labor.

    Read More

  • Why Was The Civil War So Important To American History?

    817 Words  | 4 Pages

    According to economic explanation,protectionism refers to the economic policy of restraining trade between countries through tariffs on imported goods and other government regulations. So why the north wanted restrictive policy while the south demanded free

    Read More

  • 1920s Social Changes Essay

    660 Words  | 3 Pages

    For example, the Fordney-McCumber Tariffs Act was enforced by the U.S department of state to protect businesses in the U.S. According to the Department of State, claims, “The Fordney-McCumber Tariffs Arc raised tariffs above the level set in 1913; it also authorized the president to raise and lower a given tariff rate by 50% to even out foreign and domestic production costs.” This presents the purpose of the enforcement of the Fordney-McCumber Tariffs Act. Another incident that was the cause of tariffs was a decline in every economic value in America, According to the article, Tax foundation, it states, “Historical evidence shows tariffs raise prices and reduce available quantities of good and services for U.S businesses and consumers, which resulted in lower income, reduced employment, and lower economic output.” Also, the Smoot-Hawley Tariff Act worsened the economic problems the U.S was already facing.

    Read More

  • Is The Nation Changing

    623 Words  | 3 Pages

    The protective tariff protects us product from other countries. Britain dumped the their products in the U.S. The central government got move over the states. Maryland tried to tax its national bank. Court ruled that a state cannot pass any laws that violate federal law.

    Read More

  • Essay On 28th Amendment

    504 Words  | 3 Pages

    Finally, there will be a Constitutional law protecting the American people from the clutches of greedy multi-billion dollar companies fixated on only gaining a profit. The days of giving jobs that would normally be given to foreigners given to American people will create more jobs and generate more money at the bottom for lower class citizen. This should be the 28th Amendment, an amendment protecting Americans, creating more jobs, and enforcing the rules and regulations already set by men before

    Read More

  • Increase Minimum Wage

    523 Words  | 3 Pages

    In fact, a raised income would lift about 2 million people out of poverty (Perez

    Read More

  • Fast Food Workers

    992 Words  | 4 Pages

    Therefore a lot of the unskilled workers will struggle to find jobs in this market and will go from low waged workers to unemployed which will hurt them even more. In this case, overall it would be a lose-lose situation for the unskilled workers in poverty because although there will be a raise in the total money they can earn, it will be a whole lot harder to find a job for them due to their lack of skill, and maybe a more skilled middle class worker coming in their spot. For example, if the minimum wage goes up a person looking for someone to hire for their store will pick the person who can do the job better even if it is a little bit more money because the gap of minimum wage would not be that high so therefore the unskilled workers, who are usually already in poverty because they were not taught any skills when they were young because they grew up in

    Read More

  • Compare And Contrast The Economic Policies Of Farmers And Industrial Workers In The Gilded Age

    1652 Words  | 7 Pages

    The aim of the protective tariffs was that the American market obtaining manufacture products were profitable. This was encourage of an industrial revolution after the Civil War and by putting import tax on manufacture goods that were imported in the United States

    Read More

  • Hofstede Film Summary

    1079 Words  | 5 Pages

    The theory of Hofstede says that the framework of cross cultural communication it’s described the effects on the culture of the society on the values of its members. Culture has been unclear in a many ways, Hofstede also says that culture as collective programming of the mind it is distinguished group or category of people from another. Also, he explains culture as the software of the mind and he identifies 3 aspects of human mental: human nature, personality and culture. Trompenaas definition is a model of differences in national cultures that model, it’s included 7 areas that are used to identify how people from different nations and cultures are interrupted with each others.

    Read More

  • Pestle Analysis Of Maybank Malaysia

    709 Words  | 3 Pages

    Thus, it will boost the economic status of the country as well as to increase the Gross Domestic Product of the

    Read More

More about Methods Of Protectionism

Open Document