Some empirical trade economists have noted that for many products, countries are both importers and exporters. For example, the United States both imports and exports shirts. How do you explain this?
2. [Related to the Economics in Practice on p. 364] Review the Economics in Practice on p. 364. Despite the reduction in tariffs brought about by the passage of trade agreements such as GATT, the recent recession has generated political pressure in many countries to again impose import tariffs, with this pressure especially strong in the case of imports from China. Why would a recession create pressure to impose tariffs? Who is likely to be in favor of imposing these tariffs, and who might be in favor of reducing or eliminating them? Do some research on the imposition of tariffs during the recent recession. Did many countries actually impose new tariffs on imports? What has been the response of the WTO and countries like China to the imposition of these tariffs?