5. The arguments for restricting trade Suppose there is a policy debate regardin

Question

5. The arguments for restricting trade Suppose there is a policy debate regarding the United States' imposing trade restrictions on imported semiconductors, Read the following scenario and answer the question that follows. Domestic producers of semiconductors send a lobbyist to the U.S. government to request that the government impose trade restrictions on imports of semiconductors. The lobbyist claims that the U.S. semiconductor industry is new and cannot currently compete with foreign firms. However, if trade restrictions were temporarily imposed on semiconductors, the domestic semiconductor industry could mature and adjust and would eventually be able to compete in the world market. Which of the following justifications is the lobbyist using to argue for the trade restriction on semiconductors? O Unfair-competition argument O Using-protection-as-a-bargaining-chip argument O National-security argument O Infant-industry argument O Jobs argument

Explanation / Answer

Answer.) Infant-industry argument

The lobbyist is using theinfant­-industry argument to justify trade restrictions on ball bearings. The lobbyist claims that the domestic semiconductor industry is new and cannot currently compete with foreign firms—in other words, the U.S.semiconductor industry is an infant industry. The lobbyist would like temporary trade restrictions imposed on semiconductors so that the domestic producers can learn and adjust their production techniques.This will allow the industry to mature and no longer be an infant industry. At that point, the industry will no longer need trade restrictions because domestic producers will be able to compete against foreign producers in the world market.

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