Free Trade between States within the US - Essay Example

Workers lose their jobs because US companies are not producing as much in quantity and therefore require fewer workers. The United States workers often take action and lobby their congressmen to limit the number of foreign imports and overseas production. If successful, the result may be tariffs or quotas or both. Tariffs are taxes on each item imported. Quotas set a limit on the number of items permitted to enter the country. Both cause the prices to rise because the foreign manufacturer raises the selling price in US markets. This in turn often causes Americans to purchase American products because of the lower price. This increases the demand for US products and the need for increased production. Free trade, therefore, exists within US borders to increase domestic levels of production and benefit the employees of those companies and the US economy overall. An added benefit passed on to the consumer is reasonable pricing for the items.

Question #11:

In popularly held beliefs the American producers of wine (i.e. California vineries) would benefit from a large tariff on French and German wine because the tariff imposed on French and German exporters would be passed on to the consumers in the American market thus prohibiting them from buying them at such high prices. They would in turn buy more domestic wines compared to imports. Theoretically, though, both would benefit because there are many wealthy American citizens willing to pay higher prices for imports because of the real or imagined perception that they are superior. It would require examination of the American markets to see if sales actually rise when such tariffs are imposed and a comparative examination of French and German companies to see if sales remain the same even though they are higher priced or if the added cost passed onto the consumer maintains the same level of profits.

Question #14:

Protectionist trade barriers might not save American jobs or benefit the economy because infant industries are not always able to compete with world markets even though tariffs and quotas and anti-dumping laws are in place. Some do succeed but not all. The government has also turned to providing subsidies to faltering industries and retraining workers rather than relying solely on tariffs and quotas to promote fair trade.

Although anti-dumping laws exist, the practice continues. This fails to benefit the American worker and economy because, in an effort to penetrate foreign markets, US-based companies sell their products overseas at lower prices, often below the cost of manufacturing them. They in turn raise the prices of the same items to maintain their profits. These higher prices passed on to the consumer prohibit the purchase of such items and have a negative effect on home markets resulting in layoffs and lower Gross Domestic Product.

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