desktop PCs, smartwatches, and many other consumer goods. The intention behind the policy was to shelter

U.S. manufacturers from competition, helping companies that operate domestically. China responded with

tariffs on American goods, launching a trade war. President Biden retained these tariffs and considered

additional ones, but as of August 2022, the administration was considering changes designed to reduce

inflation.

Another way to control trade is through import quotas, which are numerical limitations on the quantity of

products that a country can import. For instance, during the early 1980s, the Reagan Administration imposed

a quota on the import of Japanese automobiles. In the 1970s, many developed countries, including the United

States, found themselves with declining textile industries. Textile production does not require highly skilled

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20.1 • Protectionism: An Indirect Subsidy from Consumers to Producers 473
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