Answer to Question #251442 in Macroeconomics for Mehwash Sk

Question

Is economic nationalism justified? Is the Smoot-Hawley plan better or worse than “Buy American”? “Buy Spanish”? Or “British jobs for British workers”? Explain fully. Which viewpoint do you support, and why? Use the Internet to learn more about this issue and come up with your own argument.

Answer 1

Economic nationalism is not justified. This is due to the fact that it only seeks to implement trade policies that help to keep jobs and investments at home, while ignoring the advantage of open international trade and investment. This leads to curtailing international business activity making the global economy to slow down at a worse rate.

The Smoot-Hawley plan is worse than the "Buy American" and "Buy Spanish" plan.This is because, The Buy American policy says that products bought with taxpayers dollars must substantially all be made in the US. The Buy Spanish policy similarly says that products bought by taxpayers money must be substantially made in Spain. However, the Smoot-Hawley plan involves imposition of very high import tariffs. This results in retaliation from other countries who pose high tariffs for exports from the US. This results in a ruinous fall in global trade and a worldwide economic depression.

The Smoot-Hawley plan is also worse than the "British jobs for British workers" plan.

I support the "British jobs for British workers" plan , because this ensures that the rate of unemployment in Britain is cut down to a greater extent, given the fact that job priorities are given to Britain workers. It involves promotion and protection of the welfare of domestic workers but it takes advantage of international trade and this enables the growth of the global economy.