How Can Tarrifs Be Justified Marketing Research Assignment

How Can Tariff’s be Justified?
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How Can Tariff’s be justified?
A tariff is a type of tax that is imposed on goods and services that are imported. The main purpose of tariffs is trade restriction. The reason being that after they are imposed, prices of goods and services imported increase making them expensive to the consumers consequently. On the other hand, at the expense of foreign producers and consumers, the government and domestic producers get additional revenue. Tariff is one of the tools that are used in shaping the policy of trade. The government may impose tariffs with two reasons. The first reason is to increase revenue. The other reason is from to protect domestic industries from foreign industries. Consumers are not restricted from buying the foreign goods, but they will be available to them expensively.
Various reasons push the government to impose tariffs. The most common rationale employed in the justification of tariffs is protectionism. The government would impose tariffs to protect the following; infant industries, to support domestic employment, environment protection, to protect consumers and the purposes of national defense and to combat trade policies that are aggressive.
Nascent industries are prone to competition by the international industries that have already developed (Hartman, 2016). Since these industries are still in their early stages of development, they may not compete effectively in the global market. To protect them from the impending competition, the government would impose tariffs. Tariffs here incubate the infant industries thus allowing them ample time to grow and develop into competitive industries at the international level. Without tariffs, the imported goods and services will be cheaper to the consumers. With tariffs, the imported goods and services will be expensive to the consumers than the locally available ones. Consumers thus will shift to purchasing the local ones and in the process helping the infant industries to grow and develop.
However, there are also critics of this kind of protection. It is argued that an infant industry will grow and develop well when competition exists. Lack of competition for these industries will lead them to produce substandard goods. Since the growth of these industries depends on the subsidies, the production of low-quality goods will sap the economic growth of the country. This is because these subsidies are meant to maintain the state-backed industry.
National defense is another justification for tariffs. In the event of war or conflict, domestic industries become the sole producers for the country. It is, therefore, necessary that they are protected to ensure this. A number of products need to be protected for example food. This makes agriculture industry the most important industry to protect. No one would ever want to imagine, a country with inadequate food supply when in a war with an outside country. Most of the death will be caused by hunger than the war itself and defeat in this case is inevitable. In the same manner, other industries need to be protected too. Such products as steel, planes, aluminum, fuel, tanks, and s...