Evaluate the likely impact of an increase in protectionism on the global economy

Edexcel A-Level Economics Paper 2 June 2022

Both China and the United States have been gradually increasing the tariffs imposed on each other’s exports as their trade dispute continues. The IMF estimated that the trade dispute between China and the United States would reduce global GDP growth by 0.8 percentage points by the end of 2020. Evaluate the likely impact of an increase in protectionism on the global economy. (25 marks)

Plan

• Paragraph 1
  • Argument: protectionism leads to an increase in prices
  • Diagram: tariff diagram
  • Evaluation: question the use of tax revenue
• Paragraph 2
  • Argument: protectionism leads to a decrease in specialisation and therefore a decrease in productivity
  • Diagram: comparative advantage model
  • Evaluation: question the assumptions of the comparative advantage model

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