Sunday, March 6, 2016

Why do some people believe that high tariffs promote prosperity?

High tariffs are a means to reduce cross-border trade.
They are taxes levied on imports and can be used by the government to restrict the entry
of products made in foreign countries. Tariffs can be so high as to stop an import
altogether or can impose the addition of a sufficiently high tariff that makes these
products more expensive and less attractive than products manufactured by local
industries.


The policy of using high tariffs to protect
American industries was used extensively for a long time. The link below gives a brief
outline of their use as a means to allow fledgling American companies a chance to grow
large enough to be able to compete with more efficient companies in
Europe.


The argument for using high tariffs as a means to
increase prosperity has always been that of increased employment rates, better wages for
workers, and a compulsion for customers to buy locally manufactured products. Though
this is not an ideal way to achieve the required results, it does increase prosperity
for small intervals of time.

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