Please enable JavaScript.
Coggle requires JavaScript to display documents.
Protectionism - Coggle Diagram
Protectionism
Quotas
Definition
Set an absolute limit on the amount of certain goods that can be imported into a country and tend to be more effective than protective tariffs, which do not always dissuade consumers who are willing to pay a higher price for an imported good.
Example
An Organization of Petroleum Exporting Countries sets a production quota for crude oil in order to "maintain" the price of crude oil in world markets.
Tariffs
Definition
Employed around the world by governments to shelter domestic firms from cheap imports. This lesson examines the impact tariffs have on the market for an imported good and evaluates their effect on different stakeholders, including consumers, producer and the government.
Example
President Trump raised tariffs on imports of many Chinese goods such as fridges, washing machines and clothes.
-
Subsides
Definition
A final tool available to government for promoting domestic production over imports is the protectionist subsidy.
Example
An export subsidy is the one offered by the Indian government. This involves offering export incentives for 1.4 million tones of raw sugar as mills start sales of surplus sugar overseas to pay cane farmers.
Embargo
Definition
Is a complete prohibition against bringing a certain good into a country. Protectionist measures are usually aimed at protecting a domestic industry and the jobs it represents. But governments also pursue these measures to maintain a positive balance of trade or trade surplus.
Example
In March 1958, the United States imposed an embargo banning the sale of arms to Cuba. In February 1962, the U.S. responded to the Cuban Missile Crisis by expanding the embargo to include other imports and most other forms of trade.