1) Provide a brief description of the country/ trading partner you have chosen. The description should include the name of the country, continent where it is located, population, major city or cities, language(s) spoken, major landmarks (Eg: bodies of water, mountain ranges, deserts), climate, other characteristics that might impact commerce, production, specialization, trade, and/or other aspects of the economy.
2) Answer the following questions about trade between the U.S. and the country you have chosen.
• What are the major goods and services exported from the U.S. to the trading partner?
• What are the major goods and services imported from the trading partner to the U.S.?
• Does the U.S. have a trade surplus or a trade deficit with the trading partner 1) in goods, 2) in services and 3) overall (goods and services combined – you will need to add the two categories)
3) Answer the following questions about the impact of this trade on the United States and the partner country.
• Who in the United States benefits from this trade and in what way(s) do they benefit? (Think of occupations, socio-economic groups, other groups that might be affected) In what way do they benefit (Employment? Efficiency? Access to and cost of products or services? Exposure to new products, cultures, or perspectives?)
• Who in the United States might be harmed by this trade and in what way(s) might they be harmed?
• Who in the partner country benefits from this trade and in what way(s) do they benefit?
• Who in the partner country might be harmed by this trade and in what way(s) might they be harmed?
• What is the impact of trade on U.S. GDP overall?
4) Now consider the possibility of applying tariffs to one of the goods or services imported from the partner country to the U.S. and analyze the perspectives of different groups in the U.S. by answering the following:
• Which good or service have you chosen to consider?
• What impact would a tariff on this good or service have on the production possibility curve in the U.S.? On Gross Domestic Product (GDP) in the U.S.? On the standard of living in the U.S.?
• Who in each country might benefit from such a tariff and in what way(s) might they benefit?
• Who in each country might be harmed by such a tariff and in what way(s) might they be harmed?
• Are there any additional considerations that might influence the potential outcome of a tariff? (Eg: Might the trading partner retaliate with tariffs of its own? Are there related industries, for example “suppliers”, that might be affected by a tariff?)
• Who in the U.S. would be likely to support such a tariff? Why? Are the reasons for supporting a tariff valid according to economic theory? Explain.
• Who might oppose it? Why? Are the reasons for opposing it valid according to economic theory? Explain.
• Would you support a tariff on this good from this trading partner? Why or why not? Can you support your belief with economic theory? Has your view of tariffs changed as a result of this analysis? Explain.
5) Evaluate methods of deciding trade (and tariff) policy.
• Given the different perspectives of diverse groups regarding international trade, on what should national trade policy be based? (Efficiency? Most beneficial impact on production (GDP) and economic growth? The largest number of people who benefit? The smallest number of people who are harmed? Other considerations?)
• Should there be compensation for those who are harmed by trade policy? If so, what type of compensation and on what basis should compensation be made? How might we evaluate “benefit” and “harm” from trade policy?
6) Find a recent news article (dated within the last three months) that expresses an opinion on the topic of international trade and tariffs that you believe is valid based on economic analysis.
• In what way(s) is the opinion consistent with and supported by economic theory?
