Question

IN NEED OF A DETAILED ANSWER!! Question 2- Should the United States use tariffs and quotas to restrict foreign competition for business? Give at least three reasons to support your opinion based on the arguments for or against free trade. Be sure to take on the persona of the economist as you write your post.

Answer 1

In my opinion the United States should use tariffs and quotas to restrict foreign competition for business because of the following main benefits:

--Restriction will act as a kind of buffer to protect fledgling domestic industries in America. . The foreign firms have taken benefits of economies of scale and thus achieved relatively low levels of cost of production. New firms in America facing low levels of output and higher average costs will find it harder to compete. Therefore to protect certain industries from foreign competition tariffs and quotas must be imposed.

-- Such restrictions can help protect employment since it can become hard to compete against the cheap foreign labor. The model of international trade suggests that the nations countries specialize in activities in which they have a comparative advantage, sectors in which they do not have this benefit will shrink. Maintaining such sectors through trade barriers deprive countries from enjoying the gains possible from free trade. Cost cutting leads to layoffs, and layoffs lead to demands for protection; and protectionism also temporarily creates employment for domestic workers.

--Furthermore, the United States security would be threatened if the nation excessively depended on foreign powers as the primary source of strategic materials. In time of war, America may be required to cut off from sources of foreign supply and lose few of the materials upon which U.S. industry depends. Moreover, national security would also be beneficial to help keeping United Nations safe from terrorists and guarding industries from selling technology that could fall into enemy hands.