Increasing Tariffs: Protecting Domestic Industries From Competition

Student’s Name Tutor’s Name Course Date Book Report Tariffs play a significant role in discouraging free trade and are regularly imposed to protect domestic industry from external competition. If a tariff is charged on imported product, the producers have to raise their prices to make as much profit without tariffs. In the article, “Trump's Rumored Tariff 'Going to Be Perceived as a Trade War'" raising tariffs exposes the country to threats that cause trade wars (Soergel). Trump’s team thought of increasing tariffs as a way of protecting domestic industries from competition. During his campaigns, the president-elect Donald Trump swore to impose a tax on imported goods and services to reassure Americans job opportunities and promote the market for domestically produced goods. As stated in the article, the president threatened to raise tariffs for both China and Mexico as a way of helping the American manufacturers. Originally, the prospect of the tariffs was approximated to 5 percent, but as the CNN reports this could be much higher (Soergel). This is likely to start trade wars amongst the business community as well as interfering with the administration's idea of raising the economic growth. During an interview with the CNN, Jason Johnson, a political editor argued that the idea of raising taxes up to 5 percent would cause an increase in prices and later result in trade wars (Soergel). According to Jason, such would trigger American prices as well as having effects on their jobs. In reference to a study in 2014, an average number of apparel products are made in American materials, though the final product does not portray the American label (Soergel). Thus, the idea of raising tariffs could possibly make imports more expensive. Additionally, this could raise prices for technical goods manufactu...