What is an example of mercantilism?

By Ritesh|Updated : September 3rd, 2022

The Sugar Act of 1764, which required American colonists to pay higher customs and charges on the importation of refined sugar products created abroad, is a prime example of mercantilism.

  • Mercantilism is an economic strategy intended to increase an economy's exports while reducing its imports.
  • In European countries, imperialism and colonialism resulted from an economic plan.
  • A country prioritizes maintaining a favorable trade balance by increasing exports and reducing imports from other nations and is said to practice mercantilism.
  • Its goal is to strengthen a nation's military and political dominance while empowering it through resource and wealth acquisition.

Example of Mercantilism

  • An economic strategy or trade practice known as "mercantilism" is one that nations use to expand their wealth and power by maintaining a favourable trade balance by increasing exports while reducing imports.
  • This policy allowed European countries like Great Britain and France to purchase less expensive raw materials from their colonies and export completed goods to them in exchange for gold and silver coinage during the 16th and 18th centuries.
  • Maintaining a positive trade balance denotes a situation in which one country's loss is required for another's gain.
  • Limiting imports of products created abroad, merchants and the government collaborated to build riches during the mercantilist era.
  • However, capitalism places a greater emphasis on generating wealth by letting private enterprises export their products with little to no intervention from the government.

Summary:

What is an example of mercantilism?

An example of mercantilism is the Sugar Act of 1764, which mandated that American colonists pay higher customs and duties on importing refined sugar goods made elsewhere. Mercantilism aims to lower imports while raising exports in a given economy. Imperialism and colonialism in European nations were a result of a financial plan.

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