• How do government choices in regards to tariffs and quotas affect international relations and trade?
asked 1 year ago | Closed
Tariffs in this context are essentially a tax on imports coming from foreign countries. The federal government see a huge chunk of its revenue come from tariffs, so it plays an important role in international relations. The government is able to control trade with other countries by raising or lowering tariffs. For example, if the government wanted to promote trade with an underdeveloped economy, such as Mozambique, it could lower tariffs on imports from this country. This would give businesses an incentive to conduct trade with Mozambique because of the lower costs of importing goods.
answered 1 year ago
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