Econmic Protectionism

Activity 1

Case Study: Rainbow Chicken Foods

1: The impact imports have had on employment is that due to the cheap imports from overseas
sdomestic markets can’t compete with lowerd imports because oversea companies may exploit
economies of scale because they are able to sell export products from a different due to to more then
40,000 job were lost in the hammarsdale area.

2:Dumbing is where an overseas firm sells large quantities of a product below cost in the domestic
market for example in this case study “cheap imports from USA, Brazil and Eu countries” this means
they are dumbing large amounts of imports.

Activity 2

Case Study: Chinese Coal Tariffs

1: A tariff is a tax on imports to make them more expensive e.g. in this cast study China imposes a 6%
and 3% on Australian thermal cola and coking coals. So, these are more expensive

2: China has imposed tariffs on Australian coal because since the price of coal has decreased, people or
firms would rather buy from Australian coal rather then domestic coal so China imposed a tariff on
imports to reduce demand for Australian coal because if you increase the tariff demands for these
imported items decrease due to the increase in price so people would rather buy domestic items
because there are cheaper then the imported ones due to the increase in tariffs. The downside to this
would be that this creates a decrease in consumer choice.

Case Study: US Tariffs on foreign steel producers

1: The difference between a quota and tariff is that a quota is a physical limit on the quantity of imports
allowed into a country and a tariff is a tax on imports to make them more expensive

2: The impact of dumbing of steel products impact on US steel producers is that since “South Korea and
other countries dumped ” products in the US, US Steal producer will eventually start to lose business
because consumer will always buy cheaper product so the imported steel which is much cheaper then
the domestic steel, Due to this loss in business US Business might start making a loss so they will have
cut “hundreds of jobs”

3: The picture of the graph is where I uploaded the hw

4a: One advantage of using subsidies as a trade barrier is that this will boost exports, employment and
improve the current account. For example, in this case study the reason they countries like South Korea
and Thailand have had such cheap imports might be because of subsidies. Subsidies are money paid by a
government to make prices lower so this will allow for a boost of the current account because if the
government give money to the producer, they will have cheaper cost so demand for the products will
increase thus improving the current account.
4b: The disadvantage of using subsidies is that consumer choice will be limited, this is because domestic
producer don’t have competition so quality of item will start to decrease since there will be incentive to
increase product quality and decrease prices since there are no competitors.