Protectionism

Question 1

Define protectionism

Answer 1

government policies that create barriers to trade and so restrict international trade

Question 2

Tariffs are . . .

Answer 2

Taxes on selected imports

Question 3

Name the non-tariff policies

Answer 3

Quotas, Embargoes, product standard regulations, producer subsidies

(Non-tariff policies are just any barriers which don’t involve actual tariffs)

Question 4

Arguments for protectionism

Answer 4

To protect jobs
To protect infant industries
To ban certain goods
To avoid overdependence
To protect against dumping
To correct imbalances on the balance of payments

Question 5

Arguments against protectionism

Answer 5

Reduces speculation/ reduces allocative and productive efficiency
Prices tend to be higher due to lack of specialism and competition
Difficulty in removing trade barriers once they are in place - industries may depend on them to survive
Misallocation of resources
Retaliation

Question 6

Trade wars are . . .

Answer 6

When two or more states increase tariffs, quotas or other protectionist measures on each other in retaliation for new trade restrictions