Protectionism vs. Free Trade

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

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

Tariffs A tax on imports.

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

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

Quota A limit on the number of imports and exports.

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

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

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

Price Ramification Graphing the use of protectionism.