Economics does not only involve a country’s domestic economic affairs and companies, but also the economies of other countries. Every country’s economy affects each other. A majority of a country’s income comes from importing and exporting products to and from other countries. However, countries aren’t allowed to just trade freely, there are numerous restrictions, tariffs, and quotas and all the different kinds of products out there. All of these restrictions are government created regulations, and the government regulation that is made to influence international trade is called commercial policy. Regulations are meant to protect citizens and create fair competition. The government argues that these restrictions are protection to the country. Although they are meant to protect the country, they rarely benefit the actual domestic consumers. A few reasons that I will discuss are the creation of domestic jobs, creation of a “level” playing field, protection of “infant industries,” and “strategic trade policy” (Boyes and Melvin 475-476).
One of the government’s main reasons for restrictions on foreign goods is to help create domestic jobs. Especially in an economy like today, unemployment rate has sky-rocketed and the government is attempting to make sure that jobs are available as possible. If you hadn’t already noticed, most of the products in the United States all say “made in China.” This is because labor in China is cheap, there is room for factories, and they have most of the natural resources necessary, relatively speaking. The United States government has implemented a minimum wage law, which is, that a company must page a minimum per hour to each employee. However, many countries, particularly Asian countries, don’t have these policies. So therefore, it is much easier to hire greater amounts of cheap labor to make products and are able to sell them for cheaper, which is why so many Americans prefer buying foreign products over domestic products. Also,...