Friday, August 12, 2016

Is Trump wrong on trade?

TOPICS: International Trade
SUMMARY: Lower taxes on imports from trade deals save the average U.S. household about $10,000 a year.
CLASSROOM APPLICATION: Instructors can use the article to highlight the benefits of lowering import barriers: lower prices for consumer and intermediate goods. Instructors can also present the short-term costs to economic welfare of workers displaced by increased foreign competition due reductions in import barriers.
QUESTIONS: 
1. (Introductory) What are the benefits to a country of lowering barriers to imports?

2. (Advanced) What is the 1930 Smoot-Hawley Act? What was the effect of the Smoot-Hawley Act and tariffs imposed by other countries during this period on employment levels in the U.S.?

3. (Advanced) What are the benefits of the free-trade agreements that the U.S. has signed?

4. (Advanced) Is international trade a zero-sum game in the sense that the benefits to a country of exporting goods equals the losses to the countries importing those goods?
Reviewed By: James Dearden, Lehigh University

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