Subsidies and trade

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Provide a short explanation from your readings showing why a country would subsidize a particular industry—what benefit does it provide to them economically or politically? Then identify a specific example of a country that provided a subsidy to an industry. What was the nature of that subsidy? Who requested it? What impact did it have on the domestic economy? Was there any outcry or action taken by trading partners of that country?

Your paper should be 4-6 pages long and well written. Support your answers using 4-6 peer-reviewed articles/professional sources in addition to the textbook. Note that written assignments must have a title page, section headers, introduction, conclusion, and references page. Use of the CSU-Global Guide to Writing & APA is required in all your written papers.

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Explanation & Answer

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Government Subsidy on Agriculture
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Government Subsidy on Agriculture
A subsidy is an effort of the government to help a certain industry or a type of business
financially to boost it. A government subsidy can act on an industry by trying to cover part of the
production cost of a good or service. The government can introduce subsidies by giving tax
credits to the industry players or reimbursements. A subsidy can was be implemented by
covering some of the cost that a consumer incurs to purchase a certain good or service. Subsidies
are a method that a government uses to increases the chances of that industry succeeding usually
because of its importance. Vital industries like medicine, agriculture and fuel have to be vibrant
in any state that wants to enjoy economic success (Edwards, 2018). This industries form the
basic backbone of every economy and many industries depend on them for their production like
fuel industry is depended upon all industries that need fuel to function
The debate of the importance of subsidies for particular industries discriminating
against other industries has made the government look biased and has been blamed for misusing
the tax payers’ money. The other industries have to deal with the same challenges as the
subsidized ones and they find ways to overcome them raising the question of the benefit of
subsidies to the economy. By subsidizing a product or service, the government is aiming at
ensuring it is in high supply in the market in a bid to reduce the price at the consumer level.
Subsidies can help the players of the industry to increase their production which will help the
consumer’s access to the pro...

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