The Sugar Trade between Brazil and the United States

Without trade, sugar settles at 12 cents a pound in Brazil and 24 cents in the United States, the points marked E. That gap is an invitation: buy in Brazil, sell in the United States. Every ton shipped takes sugar out of the Brazilian market and adds it to the American one, so the Brazilian price rises and the American price falls.

The two prices meet at 16 cents. There Brazilian farmers supply 40 tons while Brazilian buyers take 25, and the 15-ton gap is exported. In the United States growers supply 72 tons while buyers want 87, and the same 15 tons arrive as imports. The slider opens the border by degrees, from no trade at all to fully open, and everything in between is the partial protectionism the book's middle pair of lines describes.