Sunday, February 9, 2014

How tariffs provide advantages to some and disadvantages to others?

How tariffs provide advantages to some and disadvantages to others?
Advantages:
Tarrifs reduce international competition against small firms,businesses and workers in the country where tariffs are placed onimports, so those small firms can stay and provide jobs and incomesfor the country's citizensBalance of trade deficit is made less prominentPrices of imports become expensive so people would opt forlocal goodsTariffs are a kind of tax, so it is still a source of incomefor the government
Disadvantages:
The countries and the multinational companies might bediscontented with their products being charged higher and will stopsupplyingIf the tariff is to high, imported inflation will occur (pricesof imports will rise continuously)Tariffs mean an additional cost to the producer of goods asthey must now pay a greater percentage of the value of their goodson tariffs placed on the goods that they import into a country,thereby reducing the percentage of the value of their goods whichgoes towards paying the workers who produce those goods

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