what is a protective tariff?
what is a protective tariff and what does it do
what is a protective tariff and what does it do
old lady
Favorite Answer
It guarantees that locally produced goods will sell at a lower price than imported goods - which gives the home-grown produce or home-manufactured items, a distinct advantage in the market place. It's done by putting a tax (tariff) on imports, to ensure that they are not priced the same as or lower than the domestic market goods.
Anonymous
Protective Tariff Definition
Anonymous
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Tariffs protect manufacturing or agriculture. The logical result of tariffs is "trade wars" which led to the great depression of the 1930s. The US exports lumber products to Canada and imports car parts. The Us Car parts industry wants more business from Detroit so they get congress to raise the tariff on Canadian car parts. So in retaliation, canada raises duties on plywood and they go back and forth on their entire list of imports and exports until both sides quit trading with the other and the surpluses in each country cause plant closings and layoffs which ripple through their economies and those of their other trading partners. Or a real case: GM want tariffs of 17% on Japanese autos because they are losing US market share to the Japs. Congress raises the tariff. GM responds, not by selling their now lower relative cost cars to Americans and increasing their market share, but by raising their prices a coincidental 17% resulting in higher profits and a huge bonus for the president of GM.
Anonymous
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RE:
What is a protective tariff?
what is a protective tariff and what does it do
Ranger
It is a tax placed on goods being imported into the United States to make the goods cost the same as identical goods produced in the United States. It is a way of protecting the jobs and profits of American Companies.
I use America as an example, but any country can do it to protect jobs and profits.