国际经济学英语Chap004.pptVIP

Back Tariff Welfare Effects: Small Nation Model Price taker nation Faces a constant world price level for its import commodity Introduction of import tariff: Lowers national welfare (Figure 4.3) Revenue effect Redistributive effect Protective effect Consumption effect Deadweight loss Back Tariff Welfare Effects:Large-Nation Model Changes in quantity of its imports, using tariff policy, influences the world price of the product Terms of trade can improve for nation imposing the tariff Effects of increases in U.S. tariffs on the world price of imported goods (Table 4.7) Back Tariff Welfare Effects:Large-Nation Model Economic effects of an import tariff for a large nation (Figure 4.4) Components of revenue effect Domestic revenue effect Terms-of-trade effect Continued Back Tariff Welfare Effects:Large-Nation Model A tariff causes: Gain due to improved terms of trade Loss due to reduced import volume Optimum tariff rate Tariff rate at which positive difference between the gain and loss is maximized Only beneficial to the importing nation A beggar-thy-neighbor policy; could invite retaliation Continued How a Tariff Burdens Exporters Higher prices of imports due to tariffs injure domestic exporters Increases input costs, leads to higher prices and reduced overseas sales Example: Caterpillar Inc. (Figure 4.5) Raises the cost of living by increasing the price of imports International repercussions lead to reductions in domestic exports Back How a Tariff Burdens Exporters Domestic exporters do not protest policies on tariff-induced cost increases because: Increases are subtle and invisible Magnitude of increases render companies incapable of developing No tangible basis for political resistance Continued Tariff Burdens Exporters Consequences for U.S. manufacturers paying more for steel inputs than foreign competitors: Increase in raw material costs Threat to accessing steel products not manufactured in the U.S. Increased foreign competition for the products they