Q1. With reference to the instruments of US trade and economic policy, consider the following statements:
- A tariff imposed on imports can raise the domestic price of the imported product and generate revenue for the imposing government.
- A Section 301 investigation is concerned with identifying foreign trade practices that the United States considers unfair or harmful to its commerce.
- The US Energy Information Administration (EIA) is the agency primarily responsible for negotiating international trade agreements on behalf of the United States.
- A proposed law authorising tariffs against countries purchasing Russian oil would, by itself, establish that such tariffs have already been imposed.
Which of the statements given above are correct?
(a) Only one
(b) Only two
(c) Only three
(d) All four
Correct answer: (b)
Explanation:
- Statement 1 is Correct: Tariffs can increase domestic prices, reduce import demand and generate government revenue, although their actual effects depend on market conditions.
- Statement 2 is Correct: Section 301 of the US Trade Act of 1974 provides a framework for responding to certain foreign acts, policies or practices considered unjustifiable, unreasonable or discriminatory and burdensome or restrictive to US commerce.
- Statement 3 is Incorrect: The EIA collects, analyses and disseminates independent energy information. It is not the principal agency responsible for negotiating trade agreements.
- Statement 4 is Incorrect: A proposed law is not equivalent to an enacted law or an implemented measure. The legislative status and any subsequent executive action must be established separately.
