Tariffs and Trade (Dis)agreements

COLLAGE BY CAROL PORTER; CANSTOCK PHOTO; WP
Lesson 
There are dozens of voluntary trade agreements between two or more nations that are intended to benefit all parties. When tariffs are imposed on a unilateral basis they may result in retaliatory tariffs and increased prices on goods and services. Activities and articles cover the costs and benefits of trade, tariffs, trade deficits and surplus, and international trade agreements.
Download Classroom Worksheets (PDF) 

Americans annually buy approximately $505 billion worth of goods from Chinese firms. In July 2018, President Trump imposed tariffs on $50 billion in Chinese products such as air conditioners, spark plugs, lamps and furniture. In September an additional $200 billion in tariffs was imposed on other Chinese imports.

 

Between September and January 2019 American importers will pay an additional 10 to 25 percent on the selected items. China said it would answer the imposed tariffs with new import taxes on $60 billion in American products.

 

While President Trump sees China as a threat to the “long-term health and prosperity of the United States economy” and holding unfair trade practices, U.S. companies are concerned that this approach will increase the price of their products and reduce their sales. Tariffs are taxes that will be passed on to consumers.

 

This is a very real case study — as well as the negotiated new trade agreements with Mexico and Canada —for an examination of trade (dis)agreements, trade deficits and surplus, and the costs and benefits of imposing tariffs above any agreement.

 

October 2018

Doing Business
Resource Graphic 
SEAN KIRKPATRICK/AP

Complete a Crossword Puzzle
Business, Economics, Reading
Students may enjoy a crossword introduction or review of terms related to trade. Give them “More Than Money: A Taxing Time.” After completing the puzzle, student may be asked to use five or more of the words in a statement or short essay about trade or tariffs.

 

Teachers are encouraged to review In the Know terms. For more complete explanations see the Economist online glossary.

 

Read an Editorial Cartoon
Art, Business, Economics, Journalism, Media Literacy, U.S. Government, U.S. History

Tom Toles October 3, 2018, visual commentary, "I have completed a historic trade deal with Canada," refers to trade agreement made with Canada and Mexico. Six questions are given to guide student reading and discussion.

 

Teachers might use the political cartoon to introduce the op-ed section of a newspaper, to review what students know about NAFTA and this new trade agreement, or to search for editorials and guest commentary about trade and agreements.

 

 

Watch a Tariffic Video
Art, Business, Economics, Fine Arts, Media Literacy

Younger and older students alike will enjoy the animated explanation of tariffs and trade wars. Created by The Washington Post staff, “How to Win a Trade War” covers the tariffs imposed by the current administration, but is general enough to apply to the concept.

 

After viewing the video once, give students “Who Wins Trade Wars?” Six screen grabs from different parts of the video present stages in a trade war. The first is at time marker 48 seconds. This may done as homework or using laptops with students in pairs working to locate the images and to summarize or explain that stage.

 

Significant Trade Agreements
Resource Graphic 
THE WASHINGTON POST

Think About (Holiday) Shopping
Business, Personal Finance

 

Before giving students this article on tariffs, teachers may wish to review the following vocabulary: “brunt,” “consumer,” “data,” “escalate,” “geopolitical,” “good,” “hedge,” “pricing,” “problematic,” “retailer,” “supply chain” and “tariff.” The terms may also be discussed after reading; ask students to locate the word and give its meaning in context.

 

Read “Will tariffs ruin holidays for shoppers?” Discussion questions and activities are provided in “Tariffs Affect Shoppers?” for teachers to use with students or in student groups.

 

Chart the Costs
Business, Personal Finance

To use with “Will tariffs ruin holidays for shoppers” or as a stand-alone activity, teachers are provided “Trade + Tariffs = Costs.”

One approach to using the chart would be to list products that students (clothes, electronics, music, sportswear) and their families (automobile, television, imported foods and beverage) purchase. At five different intervals or purchasing places record the prices. Do they see any significant changes over a two- to five-month period?

 

Rather than at different time periods, students could read to learn how tariffs are influencing the cost of products from specific companies or brands (Ford, Procter & Gamble, Walmart).

 

Think About Two Ledes

Business, Economics, Journalism

Two Ledes, Two Industries” may be used to talk about lede writing within the context of economics and business reporting. How do the ledes differ in approach? Does the anecdotal lede personalize the issue? What questions come to mind after reading both ledes?

 

Teachers may end the activity with students writing a lede about a current topic, using one of the ledes as a model. Teachers may also ask students to work in groups to find answers to the questions that were listed.

 

Trade Babe Ruth?

Business, Physical Education, U.S. History

Just a little overwhelmed with trade and tariffs, side effects and debates? Take a breather and read this column by David Von Drehle. “I’m all Kavanaughed out. So let’s talk about baseball.” provides relief, but also current events and research, stats and cultural history — and the impact of a trade.

 

Baseball and sports fans among your students may enjoy thinking about this trade as well as though being contemplated by teams. What impact do these trades make on team budgets, player salaries and fan ticket prices? Where is the breaking point in these deals?

 

 

Read About Trade

Debunk 5 Myths

Business, Economics, Government

Steven Pearlstein, a Washington Post economics columnist and the Robinson professor of public affairs at GMU, addresses ideas held abut free-market capitalism. Read and discuss “5 Myths — Capitalism.”

 

Five myths is a weekly feature of the OUTLOOK section challenging everything you think you know. 

https://www.washingtonpost.com/outlook/five-myths/?utm_term=.46041279cb59

 

Where to Store Data?
Business, Economics, Personal Finance, Technology

Trade deal ends Canada’s ability to require domestic storage of citizens’ data” reports on a very different aspect of the new North American trade agreement. Information. Personal data for business purchases.

 

Discussion might include the following:

• From where is this news reported? (Indicate dateline) Locate on a map.

• Give examples of balanced reporting.

• What are the concerns raised concerning the new restriction?

• How are these concerns addressed?

• What is the U.S. Cloud Act?

• Write a summary of the privacy concern in your own words.

 

Think Like a Reporter

Career Education, Journalism, Media Literacy

A number of business stories were in the news in 2018. Apple, Google, and Tesla got plenty of coverage for different reasons. Toys R Us and Geoffrey the Giraffe shared bankruptcy with Mattress Firm and “Top Chef” Mike Isabella. Seemingly unending scrutiny was given to trade, tariffs and retaliatory tariffs — and potential side effects on international, national and local businesses and customers.

 

Use these or current business/economics stories to introduce this job in media. How have business reporters covered the stories? Who was interviewed? How were complex topics presented in understandable approaches?

 

Then look at localizing the bigger international or national news. Give students “Think Like a Reporter: Bring the Story Home.” Guide students through the process.

 

Post NIE Guide Editor | Carol Lange
Post NIE Guide Art Editor | Carol Porter

Resource Graphic 
JABIN BOTSFORD/THE WASHINGTON POST
In The Know 

Advertising Many firms advertise their goods or services, but are they wasting economic resources? Some economists reckon that advertising merely manipulates consumer tastes and creates desires that would not otherwise exist. 

However, some economists argue that advertising is economically valuable because it increases the flow of information in the economy and reduces the asymmetric information between the seller and the consumer. This intensifies competition, as consumers can be made aware quickly when there is a better deal on offer.

 

Agriculture  Farming around the world continues to become more productive while generally accounting for a smaller share of employment and national income, although in some poor countries it remains the sector on which the country and its people depend.   The total value of international trade in agriculture has risen steadily. But the global agriculture market remains severely distorted by trade barriers and government subsidy, such as the European Union's Common agricultural policy.  
Balance of payments The total of all the money coming into a country from abroad less all of the money going out of the country during the same period. This is usually broken down into the current account and the capital account.
Brand

The stalking-horse for international capitalism. A focus for all the worries about environmental damage, human-rights abuses and sweated labour that opponents of globalisation like to put on their placards. A symbol of America's corporate power, since most of the world's best-known brands, from Coca Cola to Nike, are American. That is the case against. 

Many economists regard brands as a good thing, however. A brand provides a guarantee of reliability and quality. Consumer trust is the basis of all brand values. 

Capital MONEY or assets put to economic use, the life-blood of capitalism. Economists describe capital as one of the four essential ingredients of economic activity, the FACTORS OF PRODUCTION, along with LANDLABOUR and ENTERPRISE
Consumer confidence

How good consumers feel about their economic prospects. Measures of average consumer confidence can be a useful, though not infallible, indicators of how much consumers are likely to spend. Combined with measures such as business confidence, it can shed light on overall levels of economic activity.

Free trade The ability of people to undertake economic transactions with people in other countries free from any restraints imposed by governments or other regulators. Measured by the volume of imports and exports, world trade has become increasingly free in the years since the second world war. A fall in barriers to trade, as a result of the general agreement on tariffs and trade and its successor, the world trade organisation, has helped stimulate this growth
Tariff Often used to describe a tax on goods produced abroad imposed by the GOVERNMENT of the country to which they are exported. Many countries have reduced such tariffs as part of the process of freeing up world trade.
Trade area  In a globalising economy, it is perhaps surprising that countries increasingly trade with their nearest neighbours. One explanation is geography: as countries have lowered their TARIFF barriers, the relatively greater importance of transport costs makes proximity matter more. 
Trade deficit/surplus An excess of IMPORTS over EXPORTS is a trade deficit. An excess of exports over imports is a trade surplus.  
  SOURCE: Abbreviated definitions from the Economist
District of Columbia Public Schools Academic Content Standards 

Social Studies | U.S. Labor Market. E.4. Students analyze the elements of the U.S. labor market in a global setting.

2. Describe the current economy and labor market, including the types of goods and services produced, the types of skills workers need, the effects of rapid technological change, and the impact of international competition.

5. Measure the impact of free trade agreements, transnational labor outsourcing, and legal and illegal immigration on domestic and international workers and U.S. economic foreign policy.

 

Social Studies | International Trade. E.5. Students analyze issues of international trade and explain how the U.S. economy affects, and is affected by, economic forces beyond U.S. borders.

3. Explain the changing role of international political borders and territorial sovereignty in a global economy.

 

The District of Columbia has adopted the Common Core State Standards in reading and mathematics. In addition, DCPS has adopted new learning standards in arts, health and physical education, science, social studies, technology and world languages.

Maryland Academic Content Standards 

Economics. The student will demonstrate an understanding of economic principles, institutions, and processes required to formulate government policy. 4.1

4.1.2  The student will utilize the principles of economic costs and benefits and opportunity to analyze the effectiveness of government policy in achieving socio-economic goals.

• The role of scarcity and opportunity cost in government decision making.

• Competing socio-economic goals including: economic freedom, growth, stability, equity, security, productivity, national defense, environmental protection, and educational quality.

 

Virginia Academic Content Standards 

Economics and Personal Finance. The student will demonstrate knowledge of the global economy by

a)  explaining that when parties trade voluntarily, all benefit;

b)  distinguishing between absolute and comparative advantage;

c) distinguishing between trade deficit and trade surplus;

e)  describing the costs and benefits of trade barriers;

f)  describing the effects of international trade agreements and the World Trade Organization;

and

g)  explaining growing economic interdependence. EPF.9

 

Academic Content Standards may be found at http://www.doe.virginia.gov/testing/index.shtml.

Common Core Standards 

Craft and Structure. Evaluate authors’ differing points of view on the same historical event or issue by assessing the authors’ claims, reasoning and evidence. CCSS.ELA-LITERACY.RH.11-12.6

 

Integration of Knowledge and Ideas. Integrate information from diverse sources, both primary and secondary, into a coherent understanding or an idea or event, noting discrepancies among sources. CCSS.ELA-LITERACY.RH.11-12.9

 

Common Core standards may be found at www.corestandards.org.