MGCR 382 Chapter Notes - Chapter 9: Ad Valorem Tax, Infant Industry Argument, Tariff

• School: McGill University
• Department: Management Core
• Course: MGCR 382
• Professor: Hermann Juergens

Document Summary

Chapter 9 formulation of national trade policies: protecting domestic firms from foreign competition (trade barriers for imports, directly helping domestic firm"s exports (export subsidies, government-to-government negotiations, guaranteed loans programs) Free trade national government exerts minimal influence on the exporting and importing decisions of private firms and individuals. National defense argument: country must be self-sufficient in critical raw materials, machinery, and technology; or else they"ll be vulnerable to foreign threats: ex. Japan after wwii damaged merchant fleets showed that japan was too reliant on imported goods. Banned imported rice to promote domestic self-sufficiency argument appeals to general public (politically appealing) interest groups use this argument to get protection in their industries ex. In us wool industry gets subsidies, as well as steel, electronics, machine tools and merchant marine. Protecting developing domestic industries from fierce foreign competition using tariffs ex. Japan metals fabrication industries (iron, steel, aluminum, copper, zinc) no tariffs on imported raw ores, tariffs on processed metals.