Economics

Economics

Question 1

The trade barriers can be supported as being essential for the order of protecting the local firms from foreign dumping, for protecting the supposed newly developed industries, and for ascertaining sufficient levels of production in those sectors that are considered as necessary in the times of war. The arguments related to the so-called increments in the domestic employment, economic diversification, and protection from foreign low-wage labor, are quite extraneous to the economy of the US. All such legitimate arguments are frequently misapplied. In the US, the dumping cases by the foreign companies are rare and are challenging to prove. Oftentimes, the local manufacturers would assert that their foreign contenders are dumping when a comparative advantage is merely reflected by the decreased rates in the foreign production. The employment of antidumping duties in this case decreases the trade benefits. The manufacture of the newly developed domestic industries for the purpose of facilitating them in the development of effective manufacturing techniques is debatable in an advanced economy like the US. There is a likelihood that the trade barriers continue to prevail even after the establishment of the industry.

The argument regarding the self-adequacy of the military is debatable when it is implemented in the sectors apart from the ones that are directly allied to defense. Virtually every industry may assert that they serve a role in a wartime economy. The direct subsidies from the government, as a direct rule, are more evenhanded means to protect the military security compared to the trade protection, for the fact that, the taxpayers as a whole, instead of only the customers of protected industries, would take on the load. Also, the direct subsidies make the cost of such programs prominent instead of concealing them in the form of increased import costs. The trade barriers on the imported ...