Globalisation and trade restrictions
| English | Chinese | Pinyin |
|---|---|---|
| globalisation | 全球化 | quán qiú huà |
| multinational companies | 跨国公司 | kuà guó gōng sī |
| tariff | 关税 | guān shuì |
| protectionism | 贸易保护主义 | mào yì bǎo hù zhǔ yì |
| quota | 配额 | pèi é |
| subsidy | 补贴 | bǔ tiē |
| dumping | 倾销 | qīng xiāo |
| retaliation | 报复 | bào fù |
A more connected world
- A phone designed in California, made in China from parts across Asia, sold worldwide — that's globalisation 全球化.
- But governments sometimes try to block trade. Why, and how?
The growing integration of the world's economies is called ______.
Driven by trade, investment and technology.
Globalisation
- Globalisation = the growing integration of the world's economies through trade, investment and technology.
- It is driven by cheaper transport, the internet, and multinational companies 跨国公司.
A tariff 关税 raises the price from the world price to 'world price + tariff': domestic supply rises, demand falls, imports shrink, and the shaded box is the government's tariff revenue
Trade restrictions in the market
A tariff raises the price of imports, shifting effective supply and protecting home producers at consumers' expense.
A tariff is:
A tariff is an import tax; a quota is a quantity limit.
A quota restricts trade by:
A quota caps the quantity of imports allowed.
Trade restrictions (protectionism 贸易保护主义)
- Tariff: a tax on imports, raising their price.
- Quota 配额: a limit on the quantity that can be imported.
- Subsidy 补贴 to domestic firms, and regulations, also restrict trade.
A tariff lifts the price of imports, so consumers buy fewer of them and more is made at home.
Which are reasons governments restrict trade? (Select all that apply.)
Protection tends to raise, not lower, domestic prices.
Imposing tariffs can lead other countries to retaliate with their own.
Retaliation is a major risk of protectionism.
Why restrict trade?
- To protect new ("infant") or declining industries and the jobs in them.
- To raise revenue and guard against dumping 倾销 (foreign goods sold below cost).
- But protection raises prices and can trigger retaliation 报复.
Protection has a cost. A tariff may save some home jobs, but consumers pay higher prices and other countries may retaliate with tariffs of their own. The gains are rarely free.
Exports are sold abroad; imports are bought from abroad
You've got it
- globalisation = world economies integrating through trade, investment, technology
- tariffs (import taxes) and quotas (import limits) restrict trade
- protection saves some jobs but raises prices and risks retaliation