4.3.3

Protectionism

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Methods of Protectionism

Protectionism involves protecting a country's domestic industries, companies and jobs from foreign competition. Protectionism could take the form of tariffs, quotas or other barriers to trade.

Tariffs

Tariffs

  • Tariffs are a tax imposed on a product when it is imported into a country, which increases the price of imports to reduce the competitiveness of the goods (promoting domestic goods and services in the process).
  • Tariffs raise tax revenue for the importing country. These funds could even be used to subsidise domestic firms.
  • Tariffs will probably increase the price of goods faced by domestic consumers.
Import quotas

Import quotas

  • Quotas restrict the actual quantity of good imported.
  • They can be a 'cap' on the number of goods which can be imported, reducing foreign supply.
  • Quotas allow governments to have exact control over the quantity of goods imported but don't raise any tax revenue.
  • Quotas will probably increase the price of goods faced by domestic consumers.
Non-tariff barriers

Non-tariff barriers

  • Non-tariff barriers to trade can include import bans, rules of origin (e.g. having to prove a product did not come from a conflict zone), quality conditions imposed by the importing country on the exporting countries etc.
  • Exchange rate manipulation: A government / central bank may intervene in the foreign exchange market to lower the value of its currency by selling its currency in the foreign exchange market. This will give its exports a price advantage abroad.
Subsidies to domestic producers

Subsidies to domestic producers

  • Governments can give subsidies to domestic producers to help them to compete against other providers internationally.
  • The EU limits the subsidies that nations are allowed to implement under 'EU State Aid' rules.
  • A subsidy would reduce a firms' costs and make them more price competitive internationally.
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1

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1.1

Features of Business Organisations

1.1.1Sole Traders & Partnerships1.1.2Private & Public Limited Companies1.1.3Types of Liability & Not-For-Profits1.1.4Purposes of Businesses1.1.5Purposes of Businesses 21.1.6The Different Economic Sectors1.1.7Multinational Companies1.1.8Stakeholders1.1.9Influence of Stakeholders
1.2

Organisation of Businesses

1.2.1Organisational Structure1.2.2Types of Organisational Structures1.2.3Business Aims & Objectives1.2.4Business Aims1.2.5Business Objectives
1.3

Business Environment

1.3.1External Influences1.3.2Political & Legal Change1.3.3Economic Environment1.3.4Social & Technological Environment1.3.5Lifestyle & Technological Environment1.3.6Corporate Social Responsibility1.3.7The Competitive Environment1.3.8Innovation1.3.9Risk & Uncertainty1.3.10Porter's Five Forces1.3.11SWOT Analysis
2

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2.1

Marketing

2.1.1Setting Marketing Objectives2.1.2Customer Needs2.1.3The Market2.1.4Competition & The Market2.1.5Consumer Behaviour2.1.6Market Research2.1.7Forms of Market Research2.1.8Market Segmentation2.1.9Cultural & Social Factors in Marketing2.1.10Promotional Decisions 32.1.11Pricing Strategies
2.2

Marketing Mix

2.2.1Marketing Mix2.2.2Product Life Cycle2.2.3Pricing Decisions & Price Skimming2.2.4Pricing Decisions & Price Penetration2.2.5Promotional Decisions2.2.6Promotional Decisions 22.2.7Promotional Decisions 32.2.8Market Mapping
3

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3.1

Sources of Finance

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Financial Planning

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Financial Statements

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4

International Business

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Globalisation

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4.2

International Business

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4.3

International Economic Environment

4.3.1Globalisation4.3.2Factors Contributing to Globalisation4.3.3Protectionism4.3.4The EU & the WTO4.3.5Trading Blocs
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Factors Affecting International Business

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Management & Leadership

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Business Principles & Practices

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Quality Management

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Human Resources

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6.4

Documents & Business Decisions

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Practice questions on Protectionism

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  1. 1
    Which of the following is an example of protectionist policy?Multiple choice
  2. 2
    Which of the following are effects of a tariff?True / false
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Factors Contributing to Globalisation

The EU & the WTO