Question

What is the impact of an increase of tariffs on imported goods for domestic producer?

Answer 1

Tariffs are the duties and/or taxes that the government imposes on imported goods.  

Explanation:

• Tariffs are fixed by the government as the “percentage of the declared value” of the imported good.
• Tariffs on imported goods increase the overall buying price of the imported product which makes it difficult for the consumer to buy.
• When the same type of product is available in the domestic market then the consumer can opt for the domestic product.
• Thus imported goods tariff aids in sales of domestic products and is a great boon for the domestic producer.