Summary part 2

4. The most valid arguments for tariffs are to protect infant industries and to raise revenue for the poor

governments. The other arguments which are incorrect are: protection of local employment, preservation of

high standard of living, maintenance of military self-sufficiency and improvement of balance of trade

position.

5. A quota has an advantage over a tariff. The former can exactly control imports to a certain number of

units or value. In the case of a tariff, the increase in the price of the imports, due to increase in tariff, may not

discourage people who want the products, especially if it is very important to them.

6. Trade barriers are also imposed for the following reasons: re-election of politicians, punishment of

unfriendly foreign nations, economic nationalism, and retaliation.

7. Other trade policies are export policies (mostly export subsidies) to promote export, domestic policies

(mostly financial assistance to local producers), and retaliatory trade measures against increase of imports,

export subsidies, and predatory dumping.

8. All over the world there are many cases of trade protectionalism. Such motives of protectionalism are

primarily for economic and political reasons. Trade wars among the rich countries have become widespread

in spite of their promises for more free trade.