TRADE BARRIERS AND EMBARGOES Case Studies BARRIERS TO

TRADE BARRIERS AND EMBARGOES Case Studies

BARRIERS TO TRADE Governments set up rules and regulations to protect local businesses, generate revenue, and protect citizens from harmful products; however, these regulations discourage international trade.

TARIFFS Review? Tariffs are taxes or duties put on important products or services. 1. What products do you think should have tariffs? (Groups 1 & 3) 2. What products do you think shouldn’t? (Groups 2 & 4)

PROTECTIONISM Shielding a country’s domestic (home) industries from foreign competition by taxing imports. So if a Car (Honda) is build in Canada it might cost 24, 000$, but if it is built in Japan – the exact same car – Canada might impose a tariff of 20% therefore the care would now cost 28, 800. So which car would sell faster? Of course the less expensive version. Therefore people who make the Honda in Canada, will keep their jobs. Therefore, tariffs are a form of protectionism.

NAFTA REVIEW NAFTA is HAS become the USMCA. It is the opposite of protectionism and does not impose tariffs or duties on products traded within the North American Free Trade Zone. However, this seems to be changing. Watch the video on the USMCA and answer the question posted on our website.

INDUSTRY AND THE USMCA

TRADE QUOTA Review: government – imposed limit on the amount of product that can be imported over a certain period of time. Read the article linked on our website on Trade Quotas and answer the questions. Think about the differences and similarities between tariffs and trade quotas.

TRADE EMBARGOES Trade embargoes is a ban on trade or a specific product or with trading with a specific country. Often trade embargoes are put in place to put political pressure on a specific foreign country. Trade sanctions are like embargoes as they put penalties on one nations from another preventing trade. They basically threaten other nations and say “if you trade with nation x you cannot trade with us. ” Go to our website and follow the link to two articles on trade sanctions and complete the questions below for each.