Introduction This chapter is focused on the following questions What are the effects of various trade policy instruments? Who will benefit and who will lose from these trade policy instruments? What are the costs and benefits of protection? Will the benefits outweigh the costs? What should a nation's trade policy be? For example, should the United States use a tariff or an import quota to protect its automobile industry against competition from Japan and South Korea? Copyright C 2003 Pearson Education, Inc Slide 8-3Copyright © 2003 Pearson Education, Inc. Slide 8-3 Introduction ▪ This chapter is focused on the following questions: • What are the effects of various trade policy instruments? – Who will benefit and who will lose from these trade policy instruments? • What are the costs and benefits of protection? – Will the benefits outweigh the costs? • What should a nation’s trade policy be? – For example, should the United States use a tariff or an import quota to protect its automobile industry against competition from Japan and South Korea?