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Should we encourage trade ba
iers to support local businesses? New
Posted by Ming Ma at Tuesday, 10 April XXXXXXXXXX:42:10
Introduction: What is trade ba
iers are employed by governments or public authorities to manage the free trade of international goods and services. Many nations implement tariffs on specific goods to improve the consumption of local goods and competitions with foreign businesses (Salvatore, 2016, Pp XXXXXXXXXXThis is demonstrated with the U.S Sugar program which was authorised by the 2002 farm bill, to maintain the price for sugar and cover the crops of sugar beets and sugar cane (American Sugar Alliance, 2017).
The US sugar program
An example of where trade ba
iers have been enforced is when the US government inflates sugar prices by imposing quotas that control the amount of food manufacturers can import from other countries. (American Sugar Alliance, 2017).
The US sugar program aims to support domestic sugar prices by restricting sugar imports using a tariff rate quota and limiting the amount of sugar that businesses can sell locally when imports are below 1.532 million short tons.
Argument for trade ba
iers to support local business
A present argument supporting trade ba
iers is that duty tax raises the total cost of imported goods and services (Salvatore, 2016, Pp XXXXXXXXXX). When a country charges this tax on imported goods, it strives to discourage local consumers from importing. Thus, with fewer alternatives, there will be increased consumptions of locally-produced goods and ultimately
ing revenue and benefit local businesses.
iers are supported to protect against Dumping. Dumping exists when the same products are sold on the foreign markets for a cheaper cost, allowing it to be cheaper than being sold locally. Many nations like the United States, explicitly prohibit dumping. Duty will be posed if governments find the act of dumping (Irwin & Griswold, 2018).
This extra costs prompts the manufacturer businesses to raise the price of the item and match it to the fair market value.
Argument against trade ba
iers to support local business
iers may benefit local businesses however governments need to carefully monitor this method as it can lead to negative impacts for consumers (Salvatore, 2016, Pp XXXXXXXXXX). In fiscal year 2013, 12 million tons of refined sugar was consumed by Americans. With the implementation of tariffs, Americans paid an additional $1.4 billion more for sugar which is equivalent to “more than $310 000, per sugar farm in the United States” (Riley, XXXXXXXXXXThis demonstrates how the lack of monitoring, will increase prices on imported goods. If this continues, revenue will decrease and unemployment rate will rise. (Irwin & Griswold, 2018).
Secondly, while the aim of exporting is to
ing revenue for businesses, imports cannot be well restricted and still maintain the same volume of exports. To expand, when a country limits imports, trading partners will become poorer and thus unable to purchase our exports. Productive export industries, in which we have a comparative advantage are then forced to decrease production and reduce workers (Irwin & Griswold, 2018).
Many economics argue that trade ba
iers are not the best method to assist local businesses as providing subsidies will limit the harm to consumers. Offering subsidies will reduce production costs and eventually minimize competition. “Direct subsidies will be more economical and efficient than tariffs” (Irwin & Griswold, 2018).
Conclusion: Are trade ba
iers beneficial to local business or not
In conclusion, although the imposition of tariffs will affect the consumers and nations as a whole, it is undeniable that it will also prevent dumping and assist infant industries. With the help of government subsidies and better control of trade ba
iers, local businesses will evidently benefit. Direct subsidies from the government allows domestic industries to expand without negatively effecting the consumers.
American Sugar Alliance. (2017). US sugar policy. Retrieved April 7th, 2018, from
American Sugar Alliance: https:
Irwin, D., & Griswold, D. (2018). The Negative Effects of Trade Ba
iers on the United
States Economy | Dumping (Pricing Policy) | Monopoly. Scribd. Retrieved 10 April 2018, from https:
Riley, B. (2014). U.S. trade policy gouges American sugar consumers. Washington D.C.:
The Heritage Foundation. Retrieved April 10th, 2018, from https:
The Heritage Foundation. Retrieved April 10th, 2018, from https:
eport/us-trade-policy-gouges-american-sugar-consumersSalvatore, D. (2016). International Economics (12th edn). New York: Wiley.
By Ming Ma
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iers to support local businesses? Comments: 0 Add Comment
iers: What are they and why is everyone talking about them? New
Posted by Clare Lawlor at Tuesday, 10 April XXXXXXXXXX:41:13
Everywhere in the media at the moment are Donald Trump’s comments on China and whether a trade war might be starting. But what is the basis of this trade war? It all boils down to some trade ba
iers that both China and the United States are putting in place to protect themselves. Trade ba
iers are, simply put, ways for countries to protect their domestic trade from international imports and therefore give opportunities to local producers (Gloy & Widmar, 2018).
Recently the United States has chosen to impose tariffs as a trade ba
ier, specifically on steel and aluminium (Toscano & Gray, XXXXXXXXXXThese tariffs will impose higher costs on imports, which will ultimately be passed onto consumers. To retaliate, China has announced a list of US products that it will be imposing tariffs on (Li, Zhang, & Hart, 2018), which included ethanol and pork products.
Arguments for Trade Ba
Most of the arguments for trade ba
iers centre around providing opportunities for countries to protect themselves from international interference. As tariffs are intended to limit the number of imports that a country receives, they are then meant to create opportunities for local businesses within the country to flourish, as they have decreased competition (McBride, XXXXXXXXXXTrump’s decision to place tariffs on steel and aluminium is backed by his plan to expand and support the US steel industry, and also part of his larger plan to “make America great again” which he used as his campaign slogan to be elected (Young, 2018).
Arguments against Trade Ba
On the other hand, there are many more arguments against trade ba
iers. The first is that tariffs increase the end costs for consumers, as all fees are eventually passed onto them (Emerson, XXXXXXXXXXEmerson argues that tariffs increase the cost of living, and such actions should not be taken against the poor. Another argument is that tariffs reduce the global Gross Domestic Product (GDP), stating “trade ba
iers … increase costs, which doesn’t help business” (Xinhua, XXXXXXXXXXAnother argument looks at the impact on demand when a tariff is introduced. As the price has increased to consumers, coincidentally demand usually decreases which does not help boost any economy (Gloy & Widmar, 2018).
In the case of the tariffs that both China and the US have imposed, these will continue to have impacts across the globe, as both countries are major trade partners with many other countries. For example, China may begin to dump the steel that it would otherwise sell to the US, which is expected to have a disastrous impact on local industries within the Australian market (The Canbe
a Times, XXXXXXXXXXFurthermore, if Australia is thought to be an ally of the US, this could have major impact on our exports and imports with China, as they may begin to impose higher tariffs on us as well.
Therefore, while trade ba
iers can be implemented to protect countries and allow their producers to grow, the negatives far outweigh the positives. In most cases, free trade allows for more growth both for domestic producers and for the world as a whole.
Emerson, C. (2012, January 12). Trade ba
iers have a high cost. The Australian. Retrieved
Gloy, B. & Widmar, D. (2018, April 9). Tariffs impact price and supply & demand, ag
economists say. Successful Farming. Retrieved from https:
Li, M., Zhang, W., & Hart, C XXXXXXXXXXWhat can we learn about U.S.-China trade disputes
from China’s past trade retaliations?. Centre for Agricultural and Rural Development for Iowa State University. Retrieved from https:
McBride, J XXXXXXXXXXThe risks of U.S. steel and aluminium tariffs. Retrieved from
a Times (2018, March 14). Our win on steel and aluminium tariffs means little if
America starts trade war. Retrieved from http:
Toscano, N. & Gray, D. (2018, March 2). Winners and losers from Trump’s tariffs on
aluminium and steel. Sydney Morning Herald. Retrieved from https:
Young, J. (2018, March 12). Donald Trump reveals ‘keep America great!’ will be his 2020
campaign slogan. ABC News. Retrieved from http:
Xinhua. (2018, April 7). Interview: Raising trade ba
iers would lead to lower global GDP –
Australian expert. Retrieved from http:
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iers: What are they and why is everyone talking about them? Comments: 0 Add Comment
iers: yay or nay? New
Posted by Nicholas Leslie at Tuesday, 10 April XXXXXXXXXX:26:02
iers: yay or nay?
Nations often use trade ba
iers as a way of protecting domestic businesses from international competition. This practise is known as “protectionism”, which is in contrast to free trade. As a member of the World Trade Organisation (WTO), Australia believes in free trade. However, Australia still uses trade ba
iers when it believes its local businesses are at risk. This appears to imply that free trade is not always a good thing.
This blog will critically analyse Australia’s use of anti-dumping measures, to protect its local businesses from cheap, imported, steel. Considering the arguments both for and against, we seek to understand if trade ba
iers benefit local businesses or not. Before we can start, though, we need to understand what dumping is and why governments should get involved.
Dumping versus Anti-Dumping
According to the Australian Anti-Dumping Commission (2018), “dumping occurs when goods exported to Australia are priced lower than their ‘normal value’”. Normal value is usually determined as the ordinary price that the goods trade for in the exporter’s country. Article VI of the General