Running Head: PROS AND CONS OF TARIFFSPros and Cons of TariffsNameInstitutional Affiliation1PROS AND CONS OF TARIFFS2IntroductionTariffs are custom taxes. They are levied on imports. Tariffs are expressed as apercentage of the total cost of the imports. The primary aim of tariffs is to increase the importprices to make them more expensive to the consumers. In this case, the domestic products aregiven an advantage. Thus, tariffs can be termed as barriers to trade aimed at the prot ection of thedomestic industry. The paper will discuss both the pros and cons of tariffs. Thus, it must beunderstood that tariffs are often a tradeoff between the economy and the protection of thedomestic industries.Pros and cons of tariffsIt is essential to have a clear comprehension of tariffs to before highlighting the pros andcons. Government imposition of tariffs on the import goods rotates between the increase in thecountrys revenue and the protection of the domestic industries. The government aims at thereduction of foreign competition in the local industries. Consumers are price-sensitive and onlypurchase goods when they are cheaper. Even though consumers may not be forbidden from thepurchase of the foreign goods, an increase in the tariffs implies that the goods become veryexpensive thus giving the consumers incentives to purchase the locally produced goods. On theother hand, tariffs can also reduce the efficiency of the domestic industries. The fact thatdome ...
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