We are asked the question, what is a tariff?
” A tariff is a tax imposed by a government on goods and services imported from other countries that increases the price and makes imports less desirable, or at least less competitive, versus domestic goods and services.”
This is done to deter people from buying imported goods but rather the domestic alternatives. Who would pay for these would be the companies that import the products at higher prices.
America imports and export millions of goods each year. Although most believe we could not survive without the flow of goods and products, we could; however, it would be a very hard a difficult adjustment. It would require a rewrite of how the U.S. does business and makes money.
Although one we could easily adjust to would be the Consumer goods tradethe U.S. import over $654 billion in consumer products ranging from cell phones and shoes to medication. Along with $162 billion in export.
“It is the source of a significant portion of the gross domestic product (GDP) of many countries, and also acts as a driver for other industries, especially advertising and retail.”
An open economy is a great thing for a country. It helps bring in new and different items produced from other countries. Not only that but the country can sell its items to others as well. In 2019 the U.S exported $292.7 billion to Canada. (U.S. -Canada Trade Facts) Out of that, the U.S exported $52 billion in vehicles. In return, the U.S received $53 billion dollars worth of vehicles. (U.S. -Canada Trade Facts) The net exports for the U.S would be -1 Billion. Net exports are the difference between the value of its exports and the value of its imports for any country. (Principles of Macroeconomics Chap 18-1a) In this aspect, the U.S has a trade deficit with Canada when it comes to vehicles. The impact that these transactions have on each country is the money going to each country. Tariffs are a tax on imported goods. (Principles of Macroeconomics Chap 9-2c) That means that the juice you love that comes from Brazil may be more expensive than the same juice produced here in the U.S. In the long run, the consumers of the juice pay the cost of the tariff.
Global trade, or international trade is the exchange of capital, goods, and services across international bordees or territories because there is a need or want of goods and services. Also, international trade are economic transactions that are made between countries. Three benefits of international trade are increased revenues, decreased competition, and longer product lifespan.
Export trade is where the U.S. sends a product to another country. Export trade is trade or commerce in goods, wares, merchandise, or services that are exported, or in the course of being exported from the U.S. or any territory of the U.S. to any foreign nation. There are two types of exporting trade, whuch are direct and indirect exporting. Import trade are goods or services purchased into one nation from another, or where purchases are made from another country. For example, industrialo and consumer goods are two types of importing.
The impact of importing and exporting can influence its GDP, exchange rates, and its level of inflation and interest rates. Net exports are a measure of nation’s total trade. Its impact is the higher price level increases the relative price of domestice exports to other countries while decreasing the relative price of foreign imports from other countries. Net imports are imports in a country more than it exports.
However, if a product was purchased online made and shipped from Italy to myself in the U.S. the effect on the U.S. economy is that the U.S. economy is highly dependent on international trade and the main backbone where goods are made available and earning for foreign reserves, etc. Therefore, a tariff is a type of tax levied by a country on an imported good at the border.The impact of tariffs on international trade is that it increases the prices of imported goods and domestic consumers are left paying higher prices and the consumers are the ones that pays the cost of the tariffs.
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