Business-Government Trade Relations

Subsidies Pro’s and Con’s? Subsidies When (seem) justified? Export Financing Pro’s and Con’s? Low-interest loans and loan guarantees. Foreign Trade Zones. Special Government Agencies Pro’s and Con’s. Tariffs Pro’s and Con’s? Export / Transit / Import tariffs. Protecting American Jobs with Import Tariffs. United Steelworkers vs. United Auto Workers. Special Interest Groups and Import Tariffs. Who Pays? The Bridge Issue in Simpler Terms. So it is good that American Jobs go Overseas? NO! Using Import Tariffs Unwisely. Tariffs Why would you impose Export tariffs? Import Quotas Pro’s and Con’s? Export Quotas Pro’s and Con’s? Export Quotas More recent (recurring) examples. Embargoes Pro’s and Con’s? A complete ban on trade (all or some productsLocal Content Requirements Pro’s and Con’s. Currency Controls. Restrictions on the convertibility of a nation’s currency. Administrative Delays. Regulatory controls or bureaucratic rules to slow imports into a country. Other Non-Tariff Restrictions. Trade Restriction Economic Motives. Trade Restriction Cultural Motives. Trade Restrictions to. Preserve National Security / Respond to unfair trade. Political Motives. Trade Restrictions to “Protect Jobs”. Protect Jobs. The Irony of Politics-Based Demands. General Agreement on. Tariffs and Trade (GATTWorld Trade Organization (WTOWhat do I need to know to do well on the exam?

Export Financing: Pro’s and Con’s?low-interest loans and loan guarantees.

Increased employment, especially in stagnant regions Cheaper goods for domestic markets Decrease competitiveness of domestic companies Lost revenues from import duties and taxes Increased pollution.

+ Increased competitiveness through information and guidance for domestic companies seeking to export (often offices in dozens/hundreds of countries) + Lower prices and increased variety of imported products that are needed in home country - Some scandals due to “selective helping” and preferential treatment.

Japanese External Trade Organization (JETRO) helped thousands small and medium Japanese businesses to penetrate foreign markets and is one of the most profitable investments of Japanese government.

Tariffs: Pro’s and Con’s? Export / Transit / Import tariffs.

Economic theory clearly shows – tariffs lead to domestic losses. But tariffs are hardly ever imposed based on economic analysis, usually political decision.

No worries – the graph won’t be covered on the exam.

Protecting American Jobs with Import Tariffs:United Steelworkers vs. United Auto Workers.

So it is good that American Jobs go Overseas? NO!

Only import tariffs on goods that are produced domestically may be justified as short-term protection of local producers. Import tariffs on goods that are not produced domestically only increase price of these products and potentially increase federal budget revenues, but don’t help anyone.