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Optimal tariff argument |
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Optimal tariff argumentAn argument in favor of levying a tariff in order to improve the terms of trade. The argument is valid only in a large country, and then only if other countries do not retaliate by raising tariffs themselves. Even then, this is a beggar thy neighbor policy, since it lowers welfare abroad. See Johnson (1954).Similar MatchesLabor standards argument for protectionLabor standards argument for protectionThe view that trade restrictions (trade sanctions) should be used as a tool to improve labor standards, limiting imports, for example, from countries that do not enforce such labor rights as freedom of association and collective bargaining. Domestic distortions argument for protectionDomestic distortions argument for protectionSee second best argument. Monopoly argumentMonopoly argumentThe monopoly argument for a tariff is the same as the optimal tariff argument. It gets its name from the fact that a country using a tariff to improve the terms of trade is acting much like a monopoly firm, restricting its sales to get a better price. Self-sufficiency argument for protectionSelf-sufficiency argument for protectionThe view that a country is better off providing for its own needs than depending on imports. It may be based on fear that war or foreign governments will interrupt imports. This is a second-best argument, since many policies could provide for that contingency without sacrificing all the gains from trade. Cultural argument for protectionCultural argument for protectionThe view that imports undermine a country's culture and identity -- for example by changing consumption patterns to ones more similar to those abroad, or by reducing demands for domestically produced art and music -- and therefore that imports should be restricted. Further SuggestionsNational defense argument for protectionEnvironmental protection argument for a trade intervention Infant industry argument Patriotism argument for protection Infant industry argument Externalities argument for protection Strategic trade policy argument for a tariff Employment argument for protection Labor standards argument for protection Foreign investment argument for protection Sunset industry argument Noneconomic objectives argument for protection Pauper labor argument Fairness argument for protection Revenue argument for a tariff Terms of trade argument Income redistribution argument for a tariff Balance of payments argument for protection Second-best argument for protection |
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