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Part of a business owner’s costs when it comes to pricing, competition, manufacturing, and distribution are tariffs. Tariffs can be used by a country to increase its revenues or protect its own domestic industries. When expanding internationally, a business owner may run across countries that have tariff and nontariff distortions to trade.
Discuss the following issues regarding tariffs:
- How do countries use tariffs to increase revenues or protect industries?
- How do they affect exports?
- Who benefits from tariffs?
- Producers or consumers?
- Small, developing countries or large, developed countries?
- What other costs are involved in importing and exporting?
- When are tariffs good, and when are they bad? Why?
- How does a business owner find out what tariffs exist in individual countries, and what percentage of the cost of imports and exports is from tariffs?
- What government agencies in the United States provide this information?
- Should the United States use tariffs?
- Why or why not?