* tariffs
* subsidies
* quotas
* voluntary export restraints
* embargoes
* export incentives
* local content rules
Well basically, all methods of protection both have advantages and disadvantages. The advantages would most likely be directed towards the economy imposing such protection levels, and disadvantages being those who must undergo the protection.
Briefly..
Tariffs:
Most widely used since its a tax imposed on imported goods, its a tax in which Domestic producers do not need to pay ---> Imported good price rises as a result, and leads to domestic producers gaining better competition. Governments are also happy of course! lol, since they get more money from foreign sources.. just like them imposing high income tax on us
Anyhow, benefits are always coupled with costs, being that Tariffs or in fact any form of protection may or actually WILL cause retaliation from the other country, so generally if I say I'll put up protection on my goods, then that opposing country will say, "if u are putting up protection, I'll do the same.
Subsidies:
Generally economists prefer subsidies over tariffs for the government is spending money rather than receiving revenue, so it'll be reviewed alot. Additionally, because subsidies don't increase the price of goods in domestic economy, it further benefits consumers due to wider range of quality and cheaper goods -- > Lowered inflationary pressues.
The disadvantage being one which affects the global economy, which I'm sure you've heard of..being the CAP (european union's common agricultural policy) as well as America having such a policy, but forgot the name of it. Such policies will cause significant decreases in the global prices of that good, hence the main reason why Australia's agriculture despite its efficiency is unable to compete too much in the global market due to the lowered world price of such goods. (you can work it out through the supply and demand chart. )
Quotas:
Although the gov doesnt earn revenue from this, in reality, govts do charge importers with a licensing fee which once again contributes to higher market price of that good to be sold in the domestic economy.
The disadvantages are the same to tariffs.
* voluntary export restraints
* embargoes
* export incentives
* local content rules
These 4, are basically really easy, if you ever get stuck in answering a short answer question, just state that such measures of protection imposed on imported goods may cause a retaliatory effect of the country they are trading with.
Hope it has helped you..
