Economics Protectionism Questions
Tariffs are taxes or duties imposed on imported goods by a country's government. They are a form of protectionism, which refers to the economic policy of restricting trade between countries to protect domestic industries. Tariffs are used to make imported goods more expensive, thereby making them less competitive compared to domestic products. This protectionist measure aims to shield domestic industries from foreign competition, allowing them to grow and thrive. Tariffs can be specific (fixed amount per unit) or ad valorem (percentage of the value of the imported goods). The revenue generated from tariffs can be used to support domestic industries or for other government purposes. However, tariffs can also lead to higher prices for consumers, reduced choices, and potential retaliation from other countries through their own tariffs, resulting in trade wars.