Analyze the economic implications of the steel tariff, homework help
Analyze the economic implications of the steel tariff, homework help
When Good Trade Policies Go Bad
As a culminating demonstration of the economic reasoning skills you’ve developed in Macroeconomics, analyze the economic implications of the steel tariff. Consider and answer the following questions in the context of the economic way of thinking as it relates to the steel industry.
- What is the opportunity cost to the steel industry of supporting the steel tariff? Of not supporting the steel tariff?
- What is the opportunity cost to the U.S. government of taking action against foreign competition to protect the U.S. steel industry? Of not taking action against foreign competition to protect the U.S. steel industry?
- Which of the following stakeholders in the US steel industry benefit from the tariff? How did they benefit? How were the benefits distributed? (Consider the players involved: the small steel mills, the large companies, e.g. Bethehem, USSteel, the United Steel Workers Association, US consumers of steel like the auto industry, foreign consumers of steel, stockholders in steel companies)
- Would you characterize the actions of the major players in the steel industry as unfair competition? Cite examples to explain and defend your answer.
- How does protective trade legislation affect the incentives faced by entrepreneurs in the steel industry?
- How does protective trade legislation affect the domestic demand for U.S. steel? International demand? The derived demand for the U.S. steelworkers? wages and benefits for U.S. steelworkers?
- Based on your analysis of the steel industry’s passage of protective trade legislation, and based on what you know theoretically about the benefits of free and open trade, why do you believe protective trade legislation was passed for the steel industry?
- Cite an example from your geographic area of a protective trade legislation that protects a specific industry. Describe whether this policy had the desired effect on the industry it was intended to protect. You may want to research the World Trade Organization web site (found in external links for examples of recent trade disputes, e.g. French wine and cheese) if you are not immediately sure of an example.
- List and evaluate 3 data sources used to answer question #8
***Answers only need to be a few sentences for each question.***
