Question

Select the statement that indicates retaliatory protectionism.

Country X is nation Y’s biggest importer. Country X imports electronic items, automobile parts, and LCD televisions from nation Y. Nation Y imports precious metals, minerals, and agricultural products from country X. In 2010, country X imported 20,000 LCD TVs from nation Y. In 2013, country X began developing its own LCD TV manufacturing industry. That year, it asked nation Y to limit its LCD TV exports to 120,000 TVs. The TV manufacturing industry in nation Y suffered a setback, with revenue losses running into the billions. Soon after, nation Y increased tariffs on imports of precious metals from country X. Precious metal exporters in country X protest the raised tariff, but nation Y did not relent. To protect its precious metals industry, country X began negotiating deals with other countries.

Answer 1

Soon after, nation Y increased tariffs on imports of precious metals from country X.

Answer 2

Soon after, nation Y increased tariffs on imports of precious metals from country X.

Explanation:

Retaliatory protectionism is when a country creates or increases tariffs on imports from other countries in order to protect and to boost the local production of that given product, since Country Y was importing precious metals from country X, as a response to the limitation on exportations that contry X set on country X they put the tariffs on precious metals, to support the local producers of precious metals.