1. Protectionism & Subsidies

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Last updated 2:52 PM on 4/24/26
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7 Terms

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Use for

DATTS, FVP, EQI

Dumping, administrative barriers, trade protection, tariffs, subsidies, free trade vs protectionism, employment, quota, infant industries

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Intro / Definitions

ICF, PD

International trade

comparative advantage

free trade

protectionism

dumping

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Real Examples

US, SK

US Steel Tariffs → 25% tariff on Chinese steel to protect domestic industry.

South Korea (1960s) → infant industry protection for tech/heavy industry.


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Diagram

Standard tariff diagram:

<p><span>Standard tariff diagram:</span></p>
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Analysis (8)

TCD, RG, SAD

Tariffs/quotas

Consumers reduce demand (Q4→Q3)

Domestic producers increase output (Q1→Q2)

Reduced competition

Government tariff revenue

Subsidies

Administrative barriers

Dumping protection

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Evaluation / Mini-Conclusions (claim-counter)

DIES

Infant Industries:

Employment:

Dumping / Fair Trade:

Subsidies vs Tariffs:

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Final Judgement

Justified, Effectiveness, Success (JES)

Justified in market failure cases but usually creates deadweight loss, allocative inefficiency, and potential retaliation.

Effectiveness depends on: duration, import elasticity, government competence.

Success is ultimately constrained by the quality of domestic institutions