Unit 4 Macro: Protectionism

As discussions of free trade and protectionism enter the presidential race in America, we have been using some of the following resources in the classroom.

As Barack Obama delivered a speech in Ohio reminding Americans of tyre tariffs imposed on China in 2009 which created over 1,000 jobs for Americans one was reminded of the infamous chicken tariff retaliation by China. The irony of the creation of 1,000 jobs gaining such a loud cheer after the Fed has announced that it will spend $40bn a month for an unspecified period of time in order to kick-start an economy where an estimated 12.5 million people are out of work may have been lost on this particular crowd.

The BBC today published an extensive piece on the state of tariffs in world trade today. It can be used to introduce the concept of protectionism in terms of tax breaks and favourable conditions for domestic firms as opposed to the textbook discussions of tariffs and quotas on imports into the country.

This interview with Pascal Lamy highlights some very interesting points too. One of the main things that students and teachers can learn from it is that despite an increase in protectionist measures in recent years there have been numerous tariff removal and trade agreements brokered in recent years.