2Import and ExportImport: A good/service produced in one country and purchased by the United States.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.EX: The United States grows cotton and sells it to China to make clothes.
3Tariff Definition: A tax on imported goods. 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?
4QuotaDefinition: 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?
5Embargo Definition: An official ban on trade with another country. Countries currently under US embargo:Afghanistan Eritrea LibyaBelarus Fiji N. KoreaBurma Rep. of Guinea PakistanChina Haiti SomaliaCote d’Ivoire Iran Sri LankaCuba Iraq SudanCyprus Kyrgyzstan SyriaDem. Rep. of the Lebanon VenezuelaCongo Liberia VietnamZimbabwe
7Question #1How do you benefit from being able to buy goods made in other countries?1) More Choices2) Lower Prices
8Question #2Would 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)
9Question #3Why 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.
10Name That Country!Country A: Restricts the number of cars that may be imported each year from Country X.Answer: United States
11Name That Country!Country B: Provides subsidies to some companies so they can sell their products at lower prices to other countries.Answer: Japan
12Name That Country! Country C: Imposes taxes on certain imported goods. Answer: United States
13Why 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.
14Check for Understanding A 15% tax makes jewelry from Mexico more expensive than jewelry from the United StatesA) TariffB) QuotaC) Embargo
15Check for Understanding A 15% tax makes jewelry from Mexico more expensive than jewelry from the United StatesA) Tariff
16Check for Understanding Saudi Arabia has decided to stop selling oil to Egypt due to Egypt’s political support of Muslim Brotherhood.A) TariffB) QuotaC) Embargo
17Check for Understanding Saudi Arabia has decided to stop selling oil to Egypt due to Egypt’s political support of Muslim Brotherhood.C) Embargo
18Check for Understanding Korea are only allowed to export 15,000 automobiles per year to the United States.A) TariffB) QuotaC) Embargo
19Check for Understanding Korea are only allowed to export 15,000 automobiles per year to the United States.B) Quota