Open Trade and Protectionism

• What is open trade?

  Free flow of goods with minimal tariffs/quotas
• What is protectionism?

  Trade policy that restricts imports in order to protect domestic industries
• What are examples of protectionist policies?

  • Tariffs
  • Quotas
• What are tariffs?

  Taxes on imported goods
• What are quotas?

  A limit on the quantity or value of goods that can be imported over a specific period
• How does open trade impact strategic decision-making?

  Encourages expansion into global markets, especially for cost competitive businesses
• How does protectionism impact strategic decision-making?

  Might force businesses to produce domestically or reduce foreign reliance (e.g. re-shoring)