Thursday, September 11, 2014

What are the impacts of tariffs?

This is a very broad question. A tariff is any tax a government may place on goods coming into the country. The amount of the tariff can vary widely depending on the type of good.
Tariffs will have different impacts on different people and bodies. However, perhaps the best way to think about tariffs is this: if there is a high tax on importing, say, peaches from foreign countries, it is highly likely that people will be less likely to want to buy these expensive foreign peaches. Due to this disinclination, then, the people within the country who are growing peaches will see a boost to their business, because people will be more inclined to buy peaches not affected by the tariffs.
However, if there is a particular kind of peach that can only be purchased from outside of the country, a consumer may still want to buy that peach variety. In this instance, the impact of the tariff will be to pass on a higher cost to the consumer.

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