GEB 3375 Chapter Notes - Chapter 8: Protective Tariff, Countervailing Duties, Country Risk
Document Summary
Governments have a substantial impact on business in general, and international business in particular. Government intervention is a component of country risk. Governments intervene in trade and investment to achieve political, social or. Key rationale is to create jobs by protecting industries from foreign competition. Governments impose trade & investment barriers that benefit interest groups, such as domestic firms, industries and labor unions. Government intervention is an important dimension of country risk. Protectionism - national economic policies that restrict free trade. Usually intended to raise revenue or protect domestic industries from foreign competition. Customs - the checkpoint at national ports of entry where officials inspect imported goods and levy tariffs. Free trade- the unrestricted flow of products, services and capital across national borders (government intervention is at odds with this. Increases the cost to the importer, exporter and usually the buyer of the product. Export tariffs- taxes on products exported by their own companies.
