Import Quotas

An import quota is a term referring to an act of restricting trading through setting physical barriers regarding the quantity of product that should be imported into a certain nation in a specific time. Similar to other types of restrictions, the quotas are normally applied to benefit the entities or individuals producing goods in the specified economy. Correspondingly, the import quotas are essential on controlling the intensity attributed to the global competition. In connection to the above information, it occurs that import quotas serve a  role of protecting the upcoming local industries from being exploited by the foreign traders with the capability of selling their products at extremely lower prices. Indeed, this assignment focus on offering a comprehensive understanding of import quotas as they apply in the United States. 

There are several benefits associated with the implementation of import quotas in the United States. To illustrate, this policy aim at reviving the local market by supporting and protecting civilians intending to open businesses in their home country. Indeed, the enactment of this rule has played a vital role in revitalizing automobile industry that was making huge losses since citizens were largely relying on good from other nations. In this case, the quota police ascertained that the American inhabitants consume products manufactured locally, hence, leading to a revival of the automobile firms as well as enhancing the performance of companies dealing with glass and glass among other products. 

Moreover, the import quotas have also created employment in the United States. There initially, many trade workers transacting business relating to motor had been depleted by the foreign traders. However, the implementation of import quota policy ascertained that many automobile companies have been reopened, hence, creating extra job opportunities to citizens who were unable to secure jobs within the nation. Owing to the above changes, the workers were also benefiting from an increase in prices of oils globally since the American government was forced to subsidize prices of the locally produced oil. 

Furthermore, the import quotas also served a role of reducing the cost of living in the United States. At this point, the government had imposed heavy taxes on imports in order to ensure that foreign traders contribute to the national growth and development through taxation. Indeed, this action has reduced tax-burden for the American citizens who were unable to transact business because of encountering higher competition from the international traders who were not subjected to higher taxes. To be specific, the government ensured that American consumer was subjected to the additional cost of $660 particularly while buying vehicles made from Japan in order to promote the locally-manufactured product. 

On the other hand, the implementation of import quotas has affected American in a negative manner. For instance, this policy has a higher potential of enhancing corruption, particularly on importation. Irrespective of the United States government claiming that this new standard is meant to support domestic production, some industries may opt to avoid quotas through official bribing. The above aspect can lead to widespread fraud, a thing that will only allow the avaricious organization to make prosper whereas depleting the profitability of smaller companies that are unable to survive in a very competitive market. Similarly, import restrictions can cause the establishment of the black market since most consumers will start utilizing illegal procedures to obtain the desired products. 

In a like manner, the import quotas are also considered to have a negative implication on hiring. The above policy is always set during the process of hiring workers to the new nation. At this point, many individuals hold that organizations and companies are supposed to hire the workforce from varied demographics. For instance, there is a need for having a relatively equal number of male and female employees in a given organization. Unfortunately, the implementation of the import quotas makes the companies employ individuals without the necessary skills and capability of handling the provided tasks. 

While responding to the implementation of import quotas, non-American manufacturers have also set up their personal standards for stabilizing their operations. To be specific, the implementation of import quotas have led to an increase in prices for automobile products. Owing to the institution of the above policy, vehicles manufacturers such as Nissan, Toyota, and Honda decided to standardize the quality of their product as well as hiking the prices of vehicles in order to eliminate American local industries in the market. Eventually, this act has subjected most Americans to great suffering since they are unable to access products overseas unless they put up with the guidelines laid by the foreign companies. 

Indeed, the import quotas policy is still applied by the American government, but it has an adverse effect on the citizens in the United States. For instance, the manufacturers in this nation still continue to encounter financial challenges together with increased fuel prices since the above policy limits the civilians from consuming oil products from foreign nations. On the other hand, the impact of retaliating from the Japanese automobile industry is also affecting the American economy negatively. For instance, the United States is confirmed to have encountered a loss of approximately $4.1 billion resulting from the reprisal of products made in Japan. 

Presently, the trends of implementing import quotas have resulted in various changes in the assembly plants. To be specific, the above policy has led to the instigation of the voluntary quota system, hence, enabling the Japanese manufacturers to establish local assembly firms in America. In 1981, Japan had instigated eight assembly plants that faced great opposition since it was competent that the local manufacturers in the United States. Presently, the institution of voluntary quotas has made it easy from manufacturers from different demographics to work collaboratively. 

Correspondingly, the American government had put all the possible efforts to protect the upcoming industry by instigating various policies for promoting local business, although in a haphazard way. However, the actions by the government did not affect outsiders, but it instead affected the local manufacturers and the entire community in a negative manner. Indeed, the implementation of the import quotas is confirmed to have increased the demand for imported vehicles, which were distributed at extremely higher prices.

To conclude, the American government had implemented the import quotas with an aim of regulating the goods from foreign manufacturers such as Japan from depleting the products manufactured locally. However, the above action has contributed to various advantages to American including the creation of job opportunities as well as promoting the local businesses. On the other hand, the import quotas had also affected the automobile industry negatively because of increased prices for petroleum products as well as contributing to the rise in for the imported vehicles. Otherwise, non-American responded to import quotas by subsidizing the prices for their products and working collaboratively in order to eliminate American-produced vehicles in the market. As a matter of fact, it is essential for the national government to be instituting policies that enhance effectual interaction between traders or manufacturers from different demographic locations.

References

Crandall, R. W. (1984). Import quotas and the automobile industry: The costs of protectionism. The Brookings Review, 2(4), 8-16.

Goldberg, P. K. (1995). Product differentiation and oligopoly in international markets: The case of the US automobile industry. Econometrica: Journal of the Econometric Society, 891-951.

Pierce, J. R., & Schott, P. K. (2016). The surprisingly swift decline of US manufacturing employment. American Economic Review, 106(7), 1632-1662.