The United States has utilized tariffs, import quotas, embargoes, and sanctions over the years. Explain why America has used these, and give an example of each.

Question

What will be an ideal response?

Answer 1

Countries often use these barriers as a form of trade protectionism, which is the use of government regulations to limit the import of goods and services. Often the goal of protectionist policies is to protect domestic industries against foreign competition and to protect domestic jobs.

Tariffs are duties or taxes levied on imports. Tariffs may be used to raise money for the government (revenue tariffs) or to protect domestic production (protective tariffs). An example of the first type is the U.S. tax on all imported oil and gasoline. An example of the second type is the U.S. tariff on solar panels made in China.

Import quotas are limits on the numbers of a product that can be imported. They are often a response to dumping, which is the practice of a foreign company's exporting products abroad at a lower price than the price in the home market—or even below the costs of production—in order to drive down the price of the domestic product. The United States has used import quotas to protect domestic steel production against Chinese competition.

Embargoes are complete bans on import or export of products from a specific country. They are often the result of geopolitics; sometimes an embargo is placed on a country to "punish" it for doing something that the world community disapproves of, such as building atomic weapons. For many years, the United States had an embargo on products from Cuba.

A sanction is the trade prohibition on certain types of products, services, or technology to another country for specific reasons, including nuclear nonproliferation and humanitarian purposes. A sanction is a partial embargo. For example, the United States has trade sanctions with North Korea that prohibit the export of any material that would help North Korea with its nuclear program.