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Understanding Commercial Policy Tariffs

Chapter 7 discusses various aspects of commercial policy, including definitions of countervailing duties, antidumping duties, escape clause relief, and Section 301. It highlights the highest tariffs in high-income countries on clothing, footwear, textiles, and agricultural products, as well as the costs associated with saving jobs in agriculture and textiles. The chapter also explains consumer tolerance for tariffs and the reasons for implementing them, alongside the potential issue of industries becoming overly reliant on protectionist measures.

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3 views1 page

Understanding Commercial Policy Tariffs

Chapter 7 discusses various aspects of commercial policy, including definitions of countervailing duties, antidumping duties, escape clause relief, and Section 301. It highlights the highest tariffs in high-income countries on clothing, footwear, textiles, and agricultural products, as well as the costs associated with saving jobs in agriculture and textiles. The chapter also explains consumer tolerance for tariffs and the reasons for implementing them, alongside the potential issue of industries becoming overly reliant on protectionist measures.

Uploaded by

Tạ Châu Giang
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter 7: Commercial Policy

1.​ Definition:
-​ Countervailing Duty
-​ A tariff is imposed to offset foreign subsidies that allow exporters to sell goods
at artificially low prices. It removes the unfair cost advantage created by
subsidies, restoring fair competition between domestic and foreign producers.
-​ Antidumping Duty
-​ A tariff imposed on imports sold at less than fair value, usually below the
price in the exporter's domestic market or below cost, to counter unfair
competition. This prevents foreign firms from driving domestic producers out
of the market through predatory pricing
-​ Escape Clause Relief
-​ Temporary import restrictions (tariffs or quotas) are allowed when increased
imports are a substantial cause of serious injury to a domestic industry. It gives
domestic producers time to adjust and restructure without the immediate
pressure of foreign competition.
-​ Section 301
-​ A U.S. trade law provision authorizes action (including retaliation) against
foreign trade practices that violate trade agreements or are unjustifiable,
unreasonable, or discriminatory. It serves as a tool to enforce U.S. trade rights
and pressure trading partners to change unfair practices.
2.​ List the items that high-income countries tend to have the highest tariffs
-​ Clothing
-​ Footwears
-​ Textiles
-​ Agricultural products
3.​ List the industries that cost the most to save jobs using tariffs
-​ Agriculture
-​ Clothing
-​ Textiles
4.​ Why do consumers tolerate tariffs?
-​ Because consumers who pay the costs each pay just a little, it will limit he incentive
to organize to oppose protectionist rules.
5.​ List the reasons to have tariffs, and one problem associated with that reason
-​ Tariffs, including import duties and export duties, are used as an effective economic
regulation tool. Import duties help protect domestic production, limit imports, prevent
dumping, protect key economic sectors, and support the development of infant
industries.
-​ The problem associated with that reason is that the infant industries often become
senile lobbyists; they can stay dependent on protection instead of becoming
competitive.

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