Strategic reasons - reason for protection, Managerial Economics

Strategic Reasons

For political or strategic reasons, a country may not wish to be dependent upon imports and so may protect a home industry even if it is inefficient.  Many countries maintain industries for strategic reasons. The steel industry, energy industries, shipping, agriculture and others have used this strategic defence argument.

Bargaining

Even when a country can see no economic benefit in protection, it may find it useful to have tariffs and restrictions bargaining gambits in negotiating better terms with other nations.

Posted Date: 11/30/2012 5:00:06 AM | Location : United States







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