International Economics: IB Economics

This BBC article is a fantastic article about the effect of protectionism on trade patterns, with Australian wine exporters reacting to Chinese tariffs by shifting their focus from the Chinese market to Europe, with the UK the major destination.

This is an example of trade diversion - it is far from an optimal outcome, and reflects a reduction in economic welfare for all concerned. Far from an optimal solution, it reflects a compromise, but one that involves a welfare loss.  

This article looks at the adverse effects of Trump's tariffs on American firms - and given that some of them seem to be Trump supporters, there's a simple response.

It serves you right!

However, it is interesting to see that the effect on inflation isn't expected to be marked - given the response of US firms who face retaliatory tariffs.

A small subset of the bigger picture regarding US trade policy, this BBC report looks at how US protectionism has had an adverse effect on EU olive growers and, by implication, US consumers. 

The US tariffs have seen a 60% reduction in olive exports - which might lead you to deduce something about the size of the tariff and the elasticities of demand and supply, and it threatening investment, and the future of the sector. A good example of the detrimental effect of tariffs, and indicative of the fact that protectionism creates few winners.