The term protectionism is defined as government action aimed at protecting domestic industries through import tariffs and quotas. Specific examples from U.S. history include the dramatic reduction of tariffs that occurred in the late 19th and early 20th centuries, which allowed many U.S. industries to be dominated by European companies. These industries were able to produce goods at lower prices because of a lack of federal regulation during this period (Meloni & Swinnen, XXXXXXXXXXThe national market for these goods expanded significantly, allowing for large numbers of Americans to possess these goods and purchase them for themselves or give them as gifts.
The Smoot-Hawley Tariff Act was one specific piece of legislation that contributed to the protectionist movement at the end of the 19th century and into the early 20th century in America. The act was passed in 1930 under Hoover's presidency and was in response to plummeting prices for agricultural goods, increased imports, and a collapsing economy (Daniel et al., XXXXXXXXXXIt is a prime example of protectionism because it was an act that sought to protect domestic markets. It became law in June 1930 and began to increase tariffs on thousands of imported goods including agricultural products such as dairy, meat, and tobacco. The tariff rates rose from 40 percent to 57 percent.
As a result of the implementation of this act, the U.S. experienced an influx of many foreign goods that were being produced more cheaply than domestic products due to a lack of regulation. The result was a significant reduction in prices which allowed U.S. farmers and other companies to thrive. A good example of the success of this policy can be seen in how many American farmers were able to buy new farm equipment such as tractors and combine harvesters, which were believed to be more efficient than traditional methods. This increased efficiency allowed them to produce a higher volume of crops at a lower cost than they could before the new technologies become available.
References
Daniel, J., Radebaugh, L., Sullivan, D XXXXXXXXXXInternational Business (17th Edition) Environments & Operations
Meloni, G., & Swinnen, J XXXXXXXXXXThe political economy of regulations and trade: Wine trade 1860–1970.The World Economy,41(6), XXXXXXXXXX.
In the past few years, our country has imposed some tariffs on certain countries that we had trade with such as Canada that nearly hindered our relationship with the Canadians. Governments can create subsidies, taxing the public and giving the money to an industry, or tariffs, adding taxes to foreign products to lift prices and make domestic products more appealing. Higher taxes, fees, and greater regulations can stymie businesses or entire industries(Hall, XXXXXXXXXXChina like any other countries in the world does allow companies with great business opportunities into the country to do business. Therefore, learning about Chinese laws and regulations can be beneficial for business relationship between the other countries partnering with China. All details of a company operation in China can be affected by cultural insensitivity of the employees. In this brief paper, we will learn about Chinese business etiquette when doing business in China and why it is important to respect a trade agreement.
Most countries are limited by their natural resources and ability to produce certain goods and services. They trade with other countries to get what their population needs and demands. However, trade isn't always conducted in an amenable manner between trading partners. Policies, geopolitics, competition, and many other factors can make trading partners unhappy. One of the ways governments deal with trading partners they disagree with is through tariffs. A tariff is atax imposed by one country on the goods and services imported from another country to influence it, raise revenues, or protect competitive advantages(Yuka Hayashi, 2022).
References
Hall, M. (2022, May 06).Governments' Influence on Markets. Retrieved from Investopedia: https://www.investopedia.com/articles/economics/11/how-governments-influence-markets.asp#:~:text=Governments%20can%20create%20subsidies%2C%20taxing,stymie%20businesses%20or%20entire%20industries.
Yuka Hayashi, A. L. (2022, August 30).Biden Still Undecided on Chinese Tariffs, Commerce Secretary Says. Retrieved from The Wall Street Journal: https://www.wsj.com/articles/biden-still-undecided-on-chinese-tariffs-commerce-secretary-says XXXXXXXXXX