Explain the reason countries trade with each other. (Site 1)
Why would countries be willing to place barriers on trade? Explain two factors that might encourage a country to place quotas and tariffs on imported goods.
Answers
Answer:
Explanation:
Tariffs, or taxes imposed on imports, have been making news lately as the Trump administration initiated multiple tariff rounds on China and elsewhere.
Tariffs are a type of protectionist trade barrier that can come in several forms.
While tariffs may benefit a few domestic sectors, economists agree that free trade policies in a global market are ideal.
Tariffs are paid by domestic consumers and not the exporting country, but they have the effect of raising the relative prices of imported products.
Who Collects a Tariff?
In simplest terms, a tariff is a tax. It adds to the cost borne by consumers of imported goods and is one of several trade policies that a country can enact. Tariffs are paid to the customs authority of the country imposing the tariff. Tariffs on imports coming into the United States, for example, are collected by Customs and Border Protection, acting on behalf of the Commerce Department. In the U.K., it's HM Revenue & Customs (HMRC) that collects the money.