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IB Economics- Commentary Planning Sheet

Unit: international economics
Title of Article: Trump lifts tariffs on Canadian aluminum, warns he may resume them
Source: Reuters
Link: https://www.reuters.com/article/us-usa-trade-canada-aluminum/trump-lifts-t
ariffs-on-canadian-aluminum-warns-he-may-resume-them-idUSKBN27C2TA?e
dition-redirect=uk
Country: United States
Date of article: October 27 , 2020
Key concept Trade protection , Tariffs
Date of access October 3 , 2021
to website or
source

The overall aim is to use your economics knowledge to explain an event or issue in the world around
us. Your evaluation question should be specific to your article, but a good evaluation question
usually touches on one of these themes:

● Did the person make a good decision?

● What predictions can you make?
● What is the impact on different stakeholders?
● Can you consider another point of view?
● What are the pros and cons of this issue?
● What are the short and long-term implications?
● Weigh the costs and benefits of an action or policy.

Structure: Use the first paragraph to introduce the economic theory and possibly define key terms.
Use the other paragraphs to show how the theory helps you understand the article. Make reference
to the labels in your diagram. In 3rd – 4th paragraphs answer your evaluation question. Weigh
alternative points of view.

Which economic theory is relevant to the discussion of the article?

Trade protection and tariffs are relevant to the discussion of the article. protectionism is a
government action and policies which restricts or restrain international trade often
intended to protect local businesses and jobs from foreign competition i.e. a policy that
limits unfair competition from foreign industries.

Important terms in the article or related to Key Concept:

the article that would require definition:
Trade protection, Tariffs.
Tariffs : tariffs are taxes or duties imposed by
the government on imports to protect the
domestic producers.

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What issue is discussed in the article?

The tariffs imposed on the Canadian raw aluminum imports were removed by the President of
the United States , due to political motives at the time of the election, but Trump also threatened
to reimpose the tariffs if more than the given limit of aluminum imports were increased. The
article also discusses about how the tariffs were imposed back in 2019 due to the surge in
imports which would put the domestic producers of the United States at risk but as mentioned
above Trump has removed the tariffs due to political issues but has kept in mind the livelihoods
of the domestic producers and imposed a certain limit on the aluminum imports.
What diagram(s) could you draw and explain to illustrate this issue? Sketch them.
(Avoid having extra diagrams unless you really feel that it will strengthen your paper.)
Diagram to illustrate a problem Diagram to show the suggested policy solution

Now, evaluate this issue. If there is a policy solution, is it likely to solve the problem? What are
the likely effects, both positive and negative, in the short and the long run, on various
stakeholders? If you can, rank the impacts from biggest to least, with reasons. Lastly, for the best
sort of evaluation, how does this instance reflect on the economic theory itself? Does what
happened or what is suggested in your news article accord with what economic theory suggests
should happen? If not, why not?

As we can see, one of the issues that would arise if tariffs were being removed would be the
increase in demand for imports and the lack of demand for domestic producers which has already
occurred in 2019 and the tariff was being imposed again. Tariffs are usually imposed to balance
and support the domestic producers and the removal of tariffs affects the local businesses and
producers by creating more competition which would, in turn, lead to lower-income , reduces
employment, and therefore lower economic output. The US government keeping in mind that
this has already happened once, they’ve already come up with a policy solution that suggests

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that only a certain amount of aluminum is supposed to be imported and if not followed also
threatened to impose tariffs again which would put Canadian manufacturers in risk. Therefore,
this policy solution will benefit both countries as the Canadian aluminum manufacturers wouldn’t
pose as a big threat to the local producers in the US as there is a limit imposed as well.

Teachers Response

Submission date Remarks/Suggestions

First draft

Final draft

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