Protectionism vs. Free Trade

1. Protectionism vs. Free Trade

2. Motivation • “Protectionism is the ally of isolationism, and isolationism is the Dracula of American foreign policy.” • William G Hyland

3. Protectionism • The idea that we should limit trade to protect our self-interest.

4. Tariffs • A tax on imports.

5. Protective Tariffs • Tariffs used to limit international trade in order to protect a country’s own interest. • Usually an elastic demanded product.

6. Revenue Tariffs • Tariffs that are used primarily to raise money for the government. • Usually an inelastic demanded product.

7. Quota • A limit on the number of imports and exports.

8. Embargoes • When a country halts the export and import of a product or a group of products to or from another country.

9. Standards • A requirement that foreign goods meet a certain stiff requirement.

10. Subsidy • A payment made by the government to encourage some activity (opposite of a tax).

11. Price Ramification • Graphing the use of protectionism.