Tariffs - case study

Types of protectionism - Tariffs

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Read the article US to Impose Tariff on Tires From China and watch the video Milton Friedman on the Dangers of Protectionism (Obama's recent tariff on Chinese imports). You can do this in the web windows below, or follow the previous links to open the article/video in a new web window.

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The video below, while based around the decision to impose tyre tariffs, is based around an interview with Milton Friedman in 1980.

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You may also like to read:

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Explain the likely impact of the tariff on:
1. US domestic tyre prices
2. US tyre manufacturers
3. Chinese tyre manufacturers
Draw a diagram to illustrate these effects. Label it clearly to show:
1. The change in revenue for US tyre manufacturers
2. The tariff revenue
3. The deadweight welfare loss as a result of the tariff
Discuss the medium-term sustainability of using tariffs as a policy to protect jobs at US tyre manufacturers.
Assess the extent to which Milton Friedman's arguments for free trade apply to this decision to impose tariffs on Chinese tyres.