Don’t Fence Me
Out!
Import and Export
• Import: A good/service produced in one country
and purchased by the United States.
o EX: Japan makes Toyota vehicles and the United States purchases them
to sell to the American people.
• Export: A good/service produced in the United
States and sold to other countries.
o EX: The United States grows cotton and sells it to China to make clothes.
Tariff
• Definition: A tax on imported goods.
• http://www.usitc.gov/tata/hts/
• EX: If the United States wanted to make sure more
people bought American-made vehicles, the
government could impose a tariff on all cars
imported from other countries.
What would this cause for the automobile industry?
Quota
• Definition: A limit on the number of goods imported
into a country.
• EX: The United States government has put a quota
on the number of computers imported from China.
The United States can now only import 10,000
computers from China each year.
What would this do to the American computer
industry?
Embargo
• Definition: An official ban on trade with another country.
Countries currently under US embargo:
Afghanistan
Eritrea
Belarus
Fiji
Burma
Rep. of Guinea
China
Haiti
Cote d’Ivoire
Iran
Cuba
Iraq
Cyprus
Kyrgyzstan
Dem. Rep. of the
Lebanon
Congo
Liberia
Libya
N. Korea
Pakistan
Somalia
Sri Lanka
Sudan
Syria
Venezuela
Vietnam
Zimbabwe
Where were your clothes
made?
Question #1
• How do you benefit from being able to buy goods
made in other countries?
• 1) More Choices
• 2) Lower Prices
Question #2
• Would you favor a policy that would raise the price
of T-shirts and reduce the amount available? (There
would be less shirts to buy, and they would be more
expensive)
Question #3
• Why don’t we just have free and open trade with
whoever we want, without government
interference?
• Even though economists believe that free trade
would benefit everyone involved, barriers to trade
still exist today.
• Most barriers raise prices and reduce choices.
Name That Country!
• Country A: Restricts the number of cars that may be
imported each year from Country X.
• Answer: United States
Name That Country!
• Country B: Provides subsidies to some companies so
they can sell their products at lower prices to other
countries.
• Answer: Japan
Name That Country!
• Country C: Imposes taxes on certain imported
goods.
• Answer: United States
Why make trade harder?
• Countries establish policies to restrict trade in order
to protect their own businesses and jobs, as well as
to gain income for their own government.
• Example: In the 1970s, unions and US car makers
supported quotas on less expensive imported cars
to help keep their own products competitive.
Check for Understanding
• A 15% tax makes jewelry from Mexico more
expensive than jewelry from the United States
A) Tariff
B) Quota
C) Embargo
Check for Understanding
• A 15% tax makes jewelry from Mexico more
expensive than jewelry from the United States
A) Tariff
Check for Understanding
• Saudi Arabia has decided to stop selling oil to Egypt
due to Egypt’s political support of Muslim
Brotherhood.
A) Tariff
B) Quota
C) Embargo
Check for Understanding
• Saudi Arabia has decided to stop selling oil to Egypt
due to Egypt’s political support of Muslim
Brotherhood.
C) Embargo
Check for Understanding
• Korea are only allowed to export 15,000
automobiles per year to the United States.
A) Tariff
B) Quota
C) Embargo
Check for Understanding
• Korea are only allowed to export 15,000
automobiles per year to the United States.
B) Quota