PC04: Trade War Flashcards
1
Q
Free Trade Aspects (Benefits, negative side)
A
Benefits:
- greater availability of cheaper goods because everything will be producted where it can be made least expensively
Negative side:
- Manufacturing workers (factories) move abroad where labour is cheaper
2
Q
Why do trade wars start?
A
Mainly to protect the national industry
3
Q
How do other countries react and what are the consequences? To trade wars
A
Other countries: retaliate!
Consequences:
When protecting national industry and workers, it usually backfires –> retaliation
A better way to protect workers and limit offshoring is through negotiation & cooperation
