international trade debate - of these trade tools argue...

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When it comes to international trade there are a few things that play a vital role, tariff and quota. A tariff is a tax that one country sets on the imported goods or services from another nation. A quota is similar to a tariff but it is more a trade restriction set by a country to maintain and secure the country’s interests by limiting the amount of goods that can be imported into the country for a fixed time period. These were established to control the amount of goods that enter into the United States to protect the United States interests economically while still maintaining the healthy trading relationship with other countries. These are very important tools because it allows United States to decided what countries the United States wants to trade with. These trade tools are meant to guard the country’s economic interests and establish relations with particular nations. Some critics
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Unformatted text preview: of these trade tools argue that tariffs and quotas often lead to corruption, such as with smugglers seeking to escape tariffs and quotas and high prices for consumers, as there is less competition between domestic and international goods, which tend to be less expensive. When the dollar is strong then the United States can lower tariff to benefit the consumer, which help increase spending and enables the economy to prosper even more. However, when the dollar becomes weak the United States then needs to protect the economy by increasing the tariff. Domestic trading represents the most beneficial situation for domestic producers, as there is less competition and inflation of consumer goods becomes favorable. This is less favorable to domestic consumers and the world economy because consumers will shy away from purchasing the good because of the inflated prices....
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This note was uploaded on 09/25/2010 for the course BUSINESS XECO 212 taught by Professor Wegman during the Spring '10 term at University of Phoenix.

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international trade debate - of these trade tools argue...

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