Benjamin Harrison Campaign Handkerchief, 1888

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Trade Barriers

Types of Trade Barriers

Tariffs

Quotas

Embargoes v. Sanctions

Trade Barriers - "Government policies which placed restrictions on international trades. This can make trading more difficult or prevent trade at all due to these restrictions." 

The reasons trade barriers and tariffs are used.
1. Protecting Domestic Employment - Attempt to keep labor and industry confined instead of moving across borders for cheaper labor.
2. Protecting consumers - Tax could be used on products that may be harmful for its consumers
3. Infant Industries - Helps struggling economies and helps bolster prices by not allowing companies to undercut competitors.
4. National Security - Protect certain industries that are deemed strategically important.
5. Retaliation - Countries may set tariffs against others if they feel a trading partner has not played by the rules.

Types of Trade Barriers

There are three main types of economic trade barriers:

• Tariff - a tax put on imported goods, making the prices rises and making imports less competitive

• Embargo - Complete ban on imports from certain countries and exporting goods to them (Usually a political reason)
• There are many historical examples of embargoes
• Some example can be when U.S embargo Cuba during the Cold War and Embargo on Japan because they took over French-Indochina in World War II.

• Click here for a video about the history of U.S embargo on Cuba 

• Click here for a Pro and Con list of why Cuba's Embargo should be lifted

• Click here  for a video about America's Embargo on Cuba by The Economist

• Quota - placing a limit on imported goods

Click here for a video that explains what Trade Barriers are and what are the cost and benefits of having them.

• This video also explains the types of trade restrictions

Other forms of economic trade barriers are: 

• Voluntary Export Restraint (VER) - Where countries voluntarily agree to limit the amount of exports they send between those agreeing countries.
• Example of this can be the U.S made an agreement with Japan to limit the import of Japanese motor vehicles.  
• Click on this video that explains the U.S - Japan VER agreement on import of Japanese motor vehicles during the Reagan administration and explains the social welfare impact on it. 

• Subsidies -  The government give money to a local firm for a competitive advantage (usually for farmers) 
• Click on this animated video that explains subsidies in one minute with multiple examples. 

Reed Smoot and Willis Hawley

Tariffs

Dictionary Definition - a schedule of duties imposed by a government on imported or some countries exported goods.

A tariff has been likened to a "tax on consumers and a subsidy to producers."

General information on Tariffs

• Tariffs Raised 30 percent of government revenue in 1912, now raise 1 percent

Tariff Debates in American History

Tariff of 1816. See also this background on the Tariff of 1816

Smoot-Hawley Tariff of 1930

Tariffs and Quotas explained click here

How tariffs and quotas affect trade

Impacts of quotas and tariffs click here

Quotas

Definition
a restriction placed on the amount of a particular good that can be imported. This sort of barrier is often associated with the issuance of licenses. For example, a country may place a quota on the volume of imported citrus fruit that is allowed.
Read more: http://www.investopedia.com/articles/economics/08/tariff-trade-barrier-basics.asp#ixzz1tXJb7Q82

Commodities Subject to Import Quotas, U.S. Customs and Border Protection

For a brief explanation of quotas click here

Immigration quotas:

The Chinese Exclusion Act of 1882

     Click here to read how the Chinese Exclusion Act affected and continues to affect Chinese communities

 
The Immigration Act of 1924 (Johnson-Reed Act)

The Immigration and Nationality Act of 1952 (the McCarran-Walter Act)


 Limiting Trade Lesson Plan

Embargoes vs Sanctions

Embargo and Sanctions are used interchangeably but there are a difference between the two. 

Both are used for political reason to influence the country to follow certain orders from the country that is imposing the Embargo/Sanction on them.  

Embargoes are complete bans on imports from certain countries and exporting goods to them.

• Embargoes are part of Sanctions, but not necessarily the same.  

Sanctions are usually trade prohibition on certain products/technology to another country due to nuclear non-proliferation and humanitarian purposes. Other aspects of Sanctions can be foreign aid reduction, travel bans, asset freeze, arms embargo. 

• Click here to see a list of  countries that are sanctioned by the U.S
• Click here to watch a video about embargoes during the Jefferson administration  

• Click here  to watch a video on U.S Sanction on Iran and its impact

• Click here to watch a video on U.S Sanction on Venezuela 
• Click here to read about the Magnitsky Act, which allows any president to impose sanctions on a country that is violating human rights. 

Who enforces Embargoes?

- The Office of Foreign Assets Control (OFAC) of the U.S Department of Treasury

- Used to stop foreign countries that can do harm to U.S interests, terrorism sponsoring group, and etc. 

https://www.cfr.org/timeline/us-cuba-relations This is a link to a timeline about the U.S. embargo on Cuba.

http://www.bu.edu/articles/2021/trump-trade-wars-worsened-covid-19-racial-inequity-bu-study-reveals/ This is a link to an article about Trump's trade war with CHina, and how it perpetuated anti-Asian racism during COVID19.

Sources
http://www.investopedia.com/articles/economics/08/tariff-trade-barrier-basics.asp#axzz1tXITfrgF
http://www.merriam-webster.com/dictionary/tariff
http://www.merriam-webster.com/dictionary/quota

https://www.economicshelp.org/blog/glossary/trade-barriers/

Pictures
Barrier to Trade Picture
Tariff Picture
Quota Picture