Question

Countries clearly lose when they subsidize exports. Why does the U.S. continue to subsidize exports of some of its products?

Answer 1

Countries clearly lose when they subsidize exports because export subsidies reduces prices paid by international consumers, which means domestic consumers pay more than foreign consumers. United States continues to subsidise exports of some of its products because by doing this government pays incentives to the exporters to encourage exports of goods in other countries. As export subsidy also provide tax exemption, low cost loans direct payments for exporters also government finance international advertising.

Also it benefits to the domestic producers as decrease in the price of both imported goods and the domestic substitutes increases the amount of consumer surplus in the market.