The topic of trade tariffs and their impact on the stock market is a complex yet increasingly relevant subject for IELTS Writing Task 2. This theme intersects economics, international relations, and finance, making it a prime candidate for appearing in future IELTS exams. Based on an analysis of past IELTS questions and current global economic trends, we can expect to see variations of this topic in upcoming tests. Let’s explore a sample question and provide model essays to help you prepare effectively.
Analyzing the Question
Some people believe that imposing trade tariffs can protect domestic industries and boost the national economy. Others argue that such measures harm international trade relations and negatively impact the stock market. Discuss both views and give your own opinion.
This question requires candidates to:
- Understand the concept of trade tariffs and their potential effects
- Present arguments for and against imposing trade tariffs
- Discuss the relationship between trade policies and stock market performance
- Provide a balanced discussion of both viewpoints
- Express a personal opinion with supporting reasons
Sample Essay 1 (Band 8-9)
International trade policies, particularly the imposition of tariffs, have been a subject of heated debate among economists and policymakers. While some advocate for protectionist measures to safeguard domestic industries, others warn of the potential consequences on global trade relations and financial markets. This essay will examine both perspectives before presenting my own viewpoint.
Proponents of trade tariffs argue that these measures can shield local businesses from foreign competition, potentially leading to increased domestic production and employment. By making imported goods more expensive, tariffs can encourage consumers to buy locally produced alternatives, theoretically stimulating economic growth. Furthermore, tariffs can be used as a tool to address trade imbalances and unfair practices by other nations, potentially leveling the playing field for domestic industries.
However, critics of tariff policies highlight several drawbacks. Firstly, tariffs can lead to retaliatory measures from trading partners, potentially escalating into trade wars that disrupt global supply chains and economic cooperation. This uncertainty often negatively impacts stock markets, as investors become wary of the potential for reduced corporate profits and economic slowdown. Additionally, higher import costs can lead to increased prices for consumers, potentially reducing purchasing power and overall economic activity.
The impact of global trade agreements on financial markets is significant, with stock indices often reacting swiftly to news of tariff impositions or removals. For instance, announcements of new tariffs between major economies like the United States and China have frequently led to sharp declines in global stock markets, reflecting investor concerns about reduced international trade and economic growth.
In my opinion, while trade tariffs may offer short-term protection for specific industries, their long-term consequences on the global economy and financial markets are generally detrimental. The interconnected nature of modern economies means that protectionist measures often have far-reaching and unintended negative effects. Instead, I believe that fostering fair and open trade through multilateral agreements and addressing trade issues through diplomatic channels is a more sustainable approach to economic growth and stability.
In conclusion, while the debate on trade tariffs continues, it is crucial to consider their wide-ranging implications on both domestic and international levels. Policymakers must carefully weigh the potential short-term benefits against the long-term risks to global economic stability and financial market performance. As the world becomes increasingly interconnected, fostering cooperation and fair trade practices may prove more beneficial than protectionist measures in ensuring sustainable economic growth and stock market stability.
(Word count: 445)
Sample Essay 2 (Band 6-7)
Trade tariffs are a controversial topic in today’s global economy. Some people think they are good for protecting local industries and helping the national economy, while others believe they can harm international trade relationships and negatively affect the stock market. This essay will discuss both views and give my opinion.
On one hand, supporters of trade tariffs say they can protect domestic industries from foreign competition. When a country puts tariffs on imported goods, it makes them more expensive. This can encourage people to buy local products instead, which might help local businesses grow and create more jobs. For example, if a country puts a tariff on imported cars, it might help its own car manufacturers sell more cars and hire more workers.
On the other hand, critics argue that trade tariffs can cause problems for international trade and the stock market. When one country imposes tariffs, other countries might do the same in return, which can lead to a trade war. This can make it harder for companies to do business internationally and can cause uncertainty in the stock market. Investors might worry about reduced profits for companies that rely on international trade, which can cause stock prices to fall.
The how financial crises affect international relations is also important to consider in this context. Trade disputes can sometimes escalate into broader economic conflicts, potentially straining diplomatic ties between nations.
In my opinion, while trade tariffs might seem helpful in the short term for some industries, they can cause more problems in the long run. The global economy is very connected today, and actions taken by one country can have big effects on others. I think it’s better for countries to work together to create fair trade agreements rather than using tariffs to protect their own industries.
To conclude, trade tariffs are a complex issue with both potential benefits and drawbacks. While they might protect some local industries, they can also harm international trade relationships and cause problems in the stock market. I believe that in today’s interconnected world, cooperation and fair trade practices are more important than protectionist measures for long-term economic growth and stability.
(Word count: 390)
Explaining the Scores
Band 8-9 Essay:
This essay demonstrates excellent writing skills and a sophisticated understanding of the topic, warranting a high band score for several reasons:
-
Task Achievement: The essay fully addresses all parts of the task, discussing both viewpoints comprehensively and providing a clear personal opinion with well-developed support.
-
Coherence and Cohesion: The ideas are logically organized with clear progression throughout. Paragraphs are well-linked, and cohesive devices are used effectively and naturally.
-
Lexical Resource: The essay uses a wide range of vocabulary with very natural and sophisticated control. Key topic-specific terms are used accurately.
-
Grammatical Range and Accuracy: It displays a wide range of structures with flexibility and accuracy. Complex sentences are used effectively, and there are no noticeable errors.
-
Critical Thinking: The essay demonstrates a nuanced understanding of the topic, considering multiple perspectives and long-term implications.
Band 6-7 Essay:
This essay shows good writing skills but lacks some of the sophistication and depth of the higher band essay:
-
Task Achievement: The essay addresses all parts of the task, but the discussion of views and personal opinion could be more fully developed.
-
Coherence and Cohesion: There is a clear overall progression, but some paragraphs could be better linked. Cohesive devices are used, but not always with full flexibility.
-
Lexical Resource: The essay uses a sufficient range of vocabulary, with some less common items. There are attempts at more sophisticated expressions, though not always successfully.
-
Grammatical Range and Accuracy: It uses a mix of simple and complex sentence forms. There are no major errors, but the range is not as wide as in the Band 8-9 essay.
-
Critical Thinking: The essay presents relevant ideas but doesn’t explore the complexities of the issue as deeply as the higher band essay.
Key Vocabulary to Remember
- Trade tariffs (noun) – /treɪd ˈtærɪfs/ – Taxes imposed on imported goods
- Protectionist measures (noun phrase) – /prəˈtekʃənɪst ˈmeʒəz/ – Actions taken to restrict imports to protect domestic industries
- Retaliatory (adjective) – /rɪˈtæliəˌtɔri/ – Done in response to a similar action by another party
- Trade imbalances (noun phrase) – /treɪd ɪmˈbælənsɪz/ – Unequal trade relationships between countries
- Economic slowdown (noun phrase) – /ˌekəˈnɒmɪk ˈsloʊdaʊn/ – A period of reduced economic growth
- Multilateral agreements (noun phrase) – /ˌmʌltiˈlætərəl əˈgriːmənts/ – Treaties involving multiple countries
- Stock indices (noun phrase) – /stɒk ˈɪndɪsiːz/ – Statistical measures of a stock market’s value
- Global supply chains (noun phrase) – /ˈgloʊbəl səˈplaɪ tʃeɪnz/ – Worldwide networks involved in producing and distributing goods
- Diplomatic channels (noun phrase) – /ˌdɪpləˈmætɪk ˈtʃænəlz/ – Official means of communication between governments
- Trade war (noun) – /treɪd wɔː/ – Economic conflict resulting from extreme protectionism
In conclusion, mastering essays on trade tariffs and their impact on the stock market requires a good understanding of global economics and the ability to articulate complex ideas clearly. Practice writing essays on similar topics, such as the effects of international trade agreements on developing economies or the role of economic sanctions in global politics. Remember to structure your essays logically, use relevant examples, and demonstrate critical thinking in your analysis. Good luck with your IELTS preparation!