1. Define and discuss the notion of protectionism and discuss some of the means to enforce protectionist policies.

Protectionism refers to government protection of domestic producers by placing restrictions on foreign competition. In China's case they are being protective by not allowing their currency to rise in value against the dollar. This makes their exports cheaper and encourages domestic production. The article is suggesting that if China does not revise its protective strategy, the U.S. will engage in protectionism of its own by placing tariffs on Chinese imports to the United States. Other kinds of protectionist trade measures include quotas, "quality" standards, or any other means that decrease the amount of trade goods coming in from specific countries.

2. Explain the result of increased tariffs that would come about if the legislation mentioned in the article was passed.

A tariff is a duty (or tax) applied to goods transported from one country to another, or on imported products. Tariffs raise the prices of imported goods, thus making them less competitive within the market of the importing country. If the legislation sponsored by Schumer and Graham becomes reality, the Chinese will see their exports fall. When the tariff is placed on the Chinese products, it effectively makes the Chinese imports into the U.S. more expensive and consumers will buy fewer Chinese imports.

Multiple Choice/True False Questions