Question

If a country lowers tariffs, what will most likely happen?

Answer 1

ANSWER: If a country lowers tariffs, the import and export of the country will increase. People will have to pay less to buy imported goods and services. This will hamper the domestic market as the international market would interfere in the country's market. As the tariffs are low, the government may also earn less revenue and the country's growth may also get affected due to the decision.

Answer 2

World trade would increase and countries would increasingly specialize on the sectors in which they hold a competitive advantage. Tariffs are mainly used to try and protect domestic industry; except the real people who are harmed are consumers who have to pay higher prices for goods and services than they would have otherwise.