ECONOMICS (CBSE/UGC NET)

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ECONOMICS

BARRIERS TO TRADE

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
In 2002, President George W. Bush signed a bill that placed an 8-30% tax on all imported steel into the United States. This bill was created due to the fact that some countries, China especially, were dumping low-priced steel onto the US market. This resulted in many US steel companies declaring bankruptcy. The law was repealed in 2003. What kind of trade barrier is being described.
A
Tariff
B
Embargo
C
Quota
D
Standard
E
Subsidy
Explanation: 

Detailed explanation-1: -In October 2001, the USITC concluded that imports were a substantial cause of serious injury to the steel injury and recommended that President Bush impose tariffs of on over 170 steel products. In March 2002, President Bush imposed tariffs of 10-30% on 171 steel products.

Detailed explanation-2: -When the United States established steel tariffs in 2002, who benefited? Steel exporters in the United States. All of the following are more likely to have higher levels of trade than other similar countries EXCEPT: two countries that have a dispute over ownership of a border region.

Detailed explanation-3: -A research paper titled “The Unintended Consequences of U.S. Steel Import Tariffs: A Quantification of the Impact During 2002” found that in 2002, more American workers lost their jobs due to higher steel prices than the total number employed by the U.S. steel industry itself.

Detailed explanation-4: -Protectionism refers to the policy of protecting domestic industries against foreign competition through tariffs, import quotas and subsidies, or other restrictions placed on the imports of foreign competitors.

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