Schools economics class: Tariff wars ignore win-win from comparative advantage in trade

This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.

Specification: 

• Trade

Click to read the article below and then answer the questions:

Tariff wars ignore win-win from comparative advantage in trade

• With the help of a diagram, examine the likely effects of a country imposing a tariff on imports of a specific good on: the level of imports of the good; the level of domestic production of the good; the price paid by consumers; producer surplus; consumer surplus; government tax revenue; the net welfare gain or loss

• The article suggests two legitimate arguments for limited and targeted tariffs. Analyse and evaluate these and other arguments that might be used to defend the imposition of tariffs

• To what extent do you agree with the author’s conclusion that “cutting ourselves off from the benefits of free trade will not make us richer in the long run. Permanent general tariffs will only make the US and foreign nations considerably poorer”?

David Thaw, Harrow International School, Japan