Question

Recently the United States imposed a 35% tariff on Chinese tire imports in hopes of sustaining U.S. Jobs in tire manufacturing.This addition of tariffs is an example of

Answer 1

Answer:

This is an example of increasing protectionism.

Explanation:

Protectionism can be defined as an economic policy under which the government of a country limits imports in order to protect the domestic economy. The government adopts a number of actions to protect domestic industries. Some of these measures are

• Tariffs
• Quotas
• Subsidies
• Product standards

In the given example, the imposition of a 35% tariff on the imports of tires from China indicates increasing protectionism. This tariff will increase the price of Chinese tires in the US market. As a result, the buyers will prefer the domestic tires which will be cheaper.  

This will help the tire manufacturing industry by increasing its demand. So their production and employment will increase as well.