Who gains & who loses from the introduction of a tariff? (please help!) Watch

satisfactionatlast
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Using a suitable diagram of course.
My exam is tomorrow and I just need to clear this up. I surfed the net but it doesn't seem to give me a precise answer. Thank you so much, I really apreciate this
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Magic Dust
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(Original post by satisfactionatlast)
Using a suitable diagram of course.
My exam is tomorrow and I just need to clear this up. I surfed the net but it doesn't seem to give me a precise answer. Thank you so much, I really apreciate this
The country imposing the tariff are meant to gain as they get extra money from anything imported which they can then hypoticate into investing in their own industries. However, if they put the tariff too high they might loose trade and there for might have a decline in their economic output as people cannot afford to buy the cheap goods they could before,

Counties who have a productive advantage loose out, because they are unable to use their advantage due to the high tariffs - in third world countries this is particularly a problem due to America and the EU having high barriers on agriculture.

Business in other countries tend to loose out, as they might loose potential customers because if a tariff is imposed, it is likely they'll have to increase their prices, which may lead buyers to source from else where if it is cheaper.

Businesses in the country loose out because they may face increased prices, which could lead to reduced profit if they pass these onto their consumers, as sales may fall.

That's all I can think of from the top of my head, but I am sure there is more Hope this helps!
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satisfactionatlast
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(Original post by Magic Dust)
The country imposing the tariff are meant to gain as they get extra money from anything imported which they can then hypoticate into investing in their own industries. However, if they put the tariff too high they might loose trade and there for might have a decline in their economic output as people cannot afford to by the cheap goods they could before,

Counties who have a productive advantage loose out, because they are unable to use their advantage due to the high tariffs - in third world countries this is particularly a problem due to America and the EU having high barriers on agriculture.

Business in other countries tend to loose out, as they might loose potential customers because if a tariff is imposed, it is likely they'll have to increase their prices, which may lead buyers to source from else where if it is cheaper.

Businesses in the country loose out because they may face increased prices, which could lead to reduced profit if they pass these onto their consumers, as sales may fall.

That's all I can think of from the top of my head, but I am sure there is more Hope this helps!
thank you so much!
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username196545
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Well logically the person who imposes the tariff - you're hardly likely to impose a tariff which doesn't help you.

Random example; Fordney-McCumber Tariff in the USA, 1920s. Benefited US agrarian crops as they stopped importing European fruit and stuff (well, they put a massive tax on them so people would only buy American, trying to increase US isolationism after WW1).

This was immediately beneficial for the USA, although the result was that European countries set up tariffs against US goods, which was obvs mad for the Americans.

Overall - tariffs help the people who set them up.
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Magic Dust
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(Original post by satisfactionatlast)
thank you so much!
Also any customer in general looses out because they have less choice, they also have to pay higher prices, especially if the tariff is baring a producer with a production advantage.

Any producers in the sector that is being protected by the tariff gain because they have less competition. It also means they can sell their goods/services for higher prices and depending on the PED of the good customers wont have much choice but to pay... However, this could lead to production inefficiency, which could mean that customers loose out on the quality, or price.
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satisfactionatlast
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(Original post by Bubbles*de*Milo)
Well logically the person who imposes the tariff - you're hardly likely to impose a tariff which doesn't help you.

Random example; Fordney-McCumber Tariff in the USA, 1920s. Benefited US agrarian crops as they stopped importing European fruit and stuff (well, they put a massive tax on them so people would only buy American, trying to increase US isolationism after WW1).

This was immediately beneficial for the USA, although the result was that European countries set up tariffs against US goods, which was obvs mad for the Americans.

Overall - tariffs help the people who set them up.
thank you too
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superman19
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Been a while since I did economics but I think the easiest way is literally just an increase in price on a supply diagram. I'm probably completely wrong.
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Magic Dust
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(Original post by superman19)
Been a while since I did economics but I think the easiest way is literally just an increase in price on a supply diagram. I'm probably completely wrong.
I thought it looked this this:

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syn3rgy
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http://www.youtube.com/watch?v=dSQTbd2iJtY
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