1. As partners, take out ten items between the
two of you and make a chart of where you
think the item was produced.
Why do you think it would have been produced
in that country?
Item Country Why
3. Restricting International Trade
Tariff
Tax placed on an imported product
Quota
Limit on the amount of a good that is
allowed into a country
Tariffs
2 kinds
1. Protective Tariff
Tax on an imported product
designed to protect less-efficient domestic producers
2. Revenue Tariff
Tax placed on imported
goods to raise revenue
Quotas
Foreign goods sometimes too cheap
High tariff doesn’t protect the
domestic market
Quota keeps goods out
Other Barriers
5. Arguments for Protection
Protectionists
Person who wants to protect domestic producers against
foreign competition with tariffs, quotas, and other trade barriers
Free Traders
Person who favors fewer or even no trade restrictions
6 Arguments
1. Aiding National Defense
Protectionists: Without trade barriers, a country could
become so specialized in depends too much on other countries
2. Promoting Infant Industries
Infant Industries Argument
Argument that new and emerging industries should
be protected from foreign competition until they are strong enough to
compete
3. Protecting Domestic Jobs
Tariffs and quotes protect domestic jobs from cheap foreign
labor
6. 4. Keeping the Money at Home
Limiting imports will keep American
money in the United States instead of allowing it to
go abroad
5. Helping the Balance of Payments
Balance of Payments
Difference between money
paid to, and received from, other nations in trade
6. National Pride
Proud of National Products
7. The Free-Trade Movement
Tariffs during the Great Depression
Smoot-Hawle Tariff Act
Import duties at incredibly high rates
Reciprocal Trade Agreements Act
Reduce tariffs up to 50% if another country agreed
to do the same
Most Favored Nation Clause
Trade law allowing another country to enjoy the
same tariff reductions the United States negotiates with any third country
The World Trade Organization
General Agreement on Tariffs and Trade (GATT)
Signed by 23 countries
Trade Expansion Act
President power to further tariff reductions
World Trade Organization (WTO)
International agency that administers trade
agreements, settles trade disputes between governments, organizes trade
negotiations, and provides technical assistance and training for developing
countries
8. NAFTA
North American Free Trade Agreement
Agreement signed in 1993 to reduce tariffs and
increase trade among the United States, Canada, and Mexico
Increased trade dramatically
