The Advantages And Disadvantages Of Free Trade In The Business?
A tariff or a quota on a certain good will increase the domestic production of that good. This of course is beneficial to the domestic producers since they get to expand their production. In order to expand their production they higher more workers and that raises the wages of those workers. That is the reason why a lot of producers and workers oppose the idea of trade. A lot is at stake for them, so surly they …show more content…
Not every worker is better off. Some are hurt by competition with foreign workers. They will go through hardship, a painful transition to gain new sets of skill and find new jobs. Implementing trade barriers such as tariffs and quotas creates the same transition. When government supports an industry by implementing trade barriers, it takes away the jobs that would have been created in some other field. The problem is that when import causes a company to lay off workers, the pain and suffering that they go through is transparent and we can all see that. But when trade barriers eliminates jobs that would have been created else where, the relationship is such a ambiguous one that no one even notices. Yet another reason why presidential candidates oppose free trade. Our recourses are limited whether we support our domestic production or foreign imports. With trade, our resources get reallocated in an efficient way.
Free trade is essential for continued American hegemony around the