is the tendency of businesses technologies or philosophies to spread throughout the world or the process of making this happen The global economy is sometimes referred to as a globality characterized as a totally interconnected marketplace unhampered by time zones or national boundaries ID: 637763
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Slide1
Protectionism
Globalization
is the tendency of businesses, technologies, or philosophies to spread throughout the world, or the process of making this happen. The global economy is sometimes referred to as a globality, characterized as a totally interconnected marketplace, unhampered by time zones or national boundariesSlide2
Globalization, Trade and PovertySlide3
Trade Deficit
(negative trade balance)
How could the US reduce its trade deficit?
Tariffs, quotas, and other protectionist measures that encourage consumers to buy American rather than imported goodsSlide4
Should we Stop trading?
Protectionism
is the use of trade barriers to protect a nation's industries from foreign
competition
they
can also be used to “punish” a foreign government
EOC study guide
Globalization
#3Slide5
Tariff
—a tax on imported goods
Tariffs negatively affect trade
Suppose Americans buy golf balls made in Japan (imports) and the US government places a $1 tariff on each golf ball
What will happen as a result of the tariff?
Americans will buy fewer Japanese golf ballsWho benefits from the tariff? The domestic producers of the good benefit!
Tariffs Lead to Higher Prices
EOC study guide
Globalization
#3a Slide6Slide7Slide8Slide9
Trade Barriers as protectionism
Export subsidies
—a Government
payment to
firms
in its own country allowing the
firms to sell their goods at lower prices
EOC study guide
Globalization
#3 bSlide10
Trade Barriers as protectionism
Quota
—a
limit on the amount of a good that can be
imported
Quotas effect tradeSuppose Japan is sending 300,000 cars into the US each year and the US decides to set a quota of 200,000 cars from Japan each year
What is the effect of the quota? Fewer
Americans can buy Japanese cars
Who benefits from a
quota?
The domestic produces of the good on which the quota is placed
EOC study guide
Globalization
#3cSlide11
Trade Barriers as protectionism
Why is there corn in my coke?
EOC study guide
Globalization
#3cSlide12
If trade restriction
benefit domestic producers
at the
cost of the consumers
why does the government do it?
Politicians generally respond to the most vocal interests—they hear from those people who want the tariffs (
the producers), but not from those people who are against them (the consumers
)
It benefits relatively few producers with costs spread over relatively many consumers
Why Does the Government Do It?Slide13
Break into groups of 2-3. Sign up for a side/argument. Present finding to class.
The National-Defense Argument
Explain argument-
Criticism--
The Infant-Industry Argument
Explain argument-
Criticism--The Antidumping Argument
Explain argument-
Criticism--
The Low-Foreign-Wages Argument
Explain argument-Criticism--The Tit-for-Tat ArgumentExplain argument-Criticism--Protectionism:Arguments for Trade Restrictions pages 409-412Slide14
When one country restricts imports, its trading partner my retaliate by imposing its own restriction against the first country
Snoot-Hawley Tariff of 1930
US increased its average tariff on all products to 50%
It’s trading partners imposed higher tariffs on US goods
The decreased international trade deepened the worldwide depression
Free trade:
Arguments Against Trade RestrictionsSlide15
Chicken Tariff of 1963
European Economic Community trade organization imposed a large tariff on frozen chickens from the US
American chicken exports were cut in half
US retaliated by increasing tariffs on expensive brandies from France, potato starch from Holland, and light trucks from Germany
Pasta Tariff of 1985
US imposed tariffs on pasta from the European Economic Community
EEC retaliated by increasing tariffs on lemons and walnuts from the US
Free trade:
Arguments Against Trade
RestrictionsSlide16
Trade Barriers as Foreign Policy
Sanctions
are
domestic penalties applied by one country (or group of countries) on another
country
may
include
trade
barriers and restrictions on financial
transactions
EOC study guide
Globalization
#4aSlide17
In Nov. 2015 Russia Sanctioned Turkey for Downing their AirplaneSlide18
Trade Barriers as Foreign Policy
Embargoes
are the
partial or complete prohibition of commerce and trade with a particular country
.
As of May 2013, the United States has sanctions against:Burma, since 1997 Cuba, since 1962 Iran, since 1979
Libya, since 2011
North Korea, since 1950
Sudan, since 2002
Syria, since 1986
EOC study guide
Globalization
#4bSlide19
Protectionism reduces Outsourcing
Outsourcing
is when a company moves jobs to foreign countries where labor is cheaper
Cheaper labor lowers production costs and allow companies to make larger profits and sell their goods for a lower price
Investopedia video clip
https://www.upwork.com/
EOC study guide
Globalization
#14
Are cheaper
Iphones
bad for America?Slide20
Sanction, embargo, Subsidy, tariff, quota quiz!
Get out a piece of paper and number it #1-7Slide21
A tax of 15% makes jewelry from Mexico more expensive than jewelry made in the United
S
tates.
subsidy
, tariff, quota, Sanction or Embargo?
#1Slide22
In 1979, a group of radical students in Tehran seized the American embassy and took the people
inside
hostage
.
President Carter issued Executive Order 12170 freezing about $12 billion in Iranian assets, including
bank deposits, gold and other properties.
subsidy, tariff, quota, Sanction or Embargo?
#2Slide23
Indiana’s government will give Carrier a special tax break if they agree to keeping 2,000 jobs in Huntington instead of moving them to Mexico.
subsidy
, tariff, quota, Sanction or Embargo?
#3Slide24
Korea may export only 15,000 automobiles a year to the United States.
subsidy
, tariff, quota, Sanction or Embargo?
#4Slide25
President George W. Bush placed a temporary 8-30% tax on imported steel on March 5, 2002.
The taxes were lifted by Bush on December 4, 2003.
subsidy
, tariff, quota, Sanction or Embargo?
#5Slide26
"There are no Somali warlords that threaten peace and stability in Somalia," the deputy UN ambassador for
Somalia said.
"They are normal citizens now, members of parliament
.”
Somalia wants help strengthening its poorly equipped and ill-disciplined military that is more of a loosely affiliated umbrella group of rival militias than a cohesive fighting
force.
What needs to end?
subsidy
, tariff, quota, Sanction or Embargo?
#6Slide27
A new textile firm asks its government to provide
money so it can sell
its products overseas at a lower
price.
subsidy
, tariff, quota, Sanction or Embargo?
#7Slide28
Trade Deficit answers
Tariff
Sanction
Subsidy
Quota
Tariff
Arms embargo
Export subsidySlide29
But, How Do I Benefit From Trade?
Determine where
the
shirt
you are wearing
was produced
.
(Look for the "Made
in _______"
tag.) How do you benefit from being able to buy goods made in other countries? 2. Would you favor a policy that would raise the price on imported goods?