Subsidy
Government payment to a domestic producer. (2-3.5 % for industrial producer). Italy’s subsidies are 4 times those of GB
- cash grants (Boeing)
- low interest loans
- tax breaks
- and government equity participation in domestic firms
Subsidies allow domestic producers compete against low cost foreign imports
Also, allow domestic firms to export by making products cheaper
+ for domestic producers and - for foreign producers
Consumers pay for this through taxes or higher priced goods.