trade and protectionism application

Question 1

trumps tariffs on China 2018

Answer 1

Trump announced 20% to 50% tariffs on solar panels and washing machines. ·

March 1: Trump announced tariffs of 25% on steel and 10% on aluminum

Question 2

US and China trade war 2025

Answer 2

• US put an 145% tariff on some Chinese goods, leading to them retaliating with 125% tariff on US goods

-

Question 3

EU benefits

Answer 3

1. Trade creation → EU eliminates tariffs between member states → boosts intra-EU trade (accounts for ~60% of EU countries’ exports).
   🔁 E.g., Germany exports ~€800bn of goods per year to other EU members.
2. Economies of scale → Firms can access a market of over 440 million consumers → lower average costs → competitiveness improves globally.
   🛻 E.g., French car companies can scale up production for the EU market.
3. Free movement of labour → Workers can move where demand is higher, reducing unemployment & skill shortages.
   📍E.g., Polish workers in UK construction sector pre-Brexit.
4. Increased FDI → Countries in the EU attract more foreign investment.
   📈 E.g., Ireland attracted major US tech firms due to EU access.

Question 4

drawbacks of the EU

Answer 4

1. Trade diversion → Countries may buy from EU members even if cheaper goods are available elsewhere.
   - E.g., EU CAP (Common Agricultural Policy) supports inefficient EU farmers over cheaper global imports.
2. Loss of sovereignty → Countries must follow EU trade, competition, and environmental laws.
   - E.g., UK’s decision to leave the EU (Brexit) partly due to concerns over loss of control.
3. Budget contributions → Richer countries contribute more to EU budget (e.g., Germany pays the most).

Question 5

AfCFTA (African Continental Free Trade Area) benefits

Answer 5

Size: World’s largest free trade area by number of countries (54), covering 1.4 billion people
Goal: Boost intra-African trade (currently only ~15% of Africa’s total trade, vs. ~60% in the EU)

1. Trade creation and diversification → Removing tariffs between members → cheaper goods → more cross-border trade.
   🚛 E.g., Ghana can export cocoa products more easily to Nigeria without high tariffs.
2. Development of regional supply chains → Encourages manufacturing hubs and industrialisation.
   🏭 E.g., Ethiopia could export textiles to Kenya for further processing.
3. Job creation and poverty reduction → Economic growth through trade integration can raise incomes.
   📈 World Bank: AfCFTA could lift 30 million people out of extreme poverty by 2035.
4. Greater political cooperation → Trade often encourages peace, stability, and collaboration between countries.

Question 6

disadvantages of Afcfta

Answer 6

. Unequal development levels → Big economies (e.g., Nigeria, South Africa) may dominate trade, hurting smaller/less developed nations.
💬 Risk of regional inequality within the bloc.

2. Poor infrastructure → Limits actual trade flow, even with tariff reductions.
   🚧 Many countries lack reliable transport, customs systems, or electricity.
3. Weak enforcement → Border corruption and red tape may persist, making rules hard to implement uniformly.
4. Loss of tariff revenue → Many African governments rely on import taxes → may reduce funds for healthcare, education, etc.

Question 7

EU’s Common External Tariff (CET)

Answer 7

Raw materials (e.g. metals, wood) - 0–2% (often low to encourage imports)

Cars (passenger vehicles) - 10%

Agricultural goods (e.g. cereals) - Can be 10–50% or more

Clothing and textiles - Around 12%

Milk powder (dairy imports) Over 40%