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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 MatchesPauper labor argumentPauper labor argumentThe view that a country loses by importing from another country that has low wages, presumably by lowering wages at home. This view ignores the fact that low wages are due to low productivity, and that the high-wage home country, with high productivity, will have comparative advantage in some products and will gain from trade. Infant industry argumentInfant industry argumentArgument that industries in the developing and emerging sectors of the economy need protection against international competition in order to establish themselves. Strategic trade policy argument for a tariffStrategic trade policy argument for a tariffIn an example of strategic trade policy, the use of a tariff to extract monopoly profits from a foreign monopolist, or to shift profit from foreign to domestic competitors in an international oligopoly. The monopoly case seems to have originated with Katrak (1977), but the classic treatment of the larger issue is Brander and Spencer (1984). Sunset industry argumentSunset industry argumentThe argument, in contrast to the infant industry argument, that a mature industry should be provided protection, either to help it restore its competitiveness, or to cushion its exit from the economy. 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 SuggestionsRevenue argument for a tariffNational defense argument for protection Externalities argument for protection Infant industry argument Labor standards argument for protection Foreign investment argument for protection Fairness argument for protection Income redistribution argument for a tariff Employment argument for protection Patriotism argument for protection Terms of trade argument Domestic distortions argument for protection Second-best argument for protection Environmental protection argument for a trade intervention Labor standards argument for protection Balance of payments argument for protection Self-sufficiency argument for protection Noneconomic objectives argument for protection Monopoly argument |
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