Question

what are the socioeconomic impacts of high tariffs on imports and exports for the US economy, and then the consumer? Related to finance.   Please elaborate your answer.

Answer 1

US Economy is a major Exporter to Technology and Consumer Goods Eg, Cars, Heavy Machinery ,

If the Exports are taxed the cost of goods increase hence less takers of that product. Eg If bike manufacturer Harley Davidson

is taxed 50% to import in other like India one has to pay 150% of the cost of the bike which is a bit too much

The other aspect is the Balance of payments which the countries have to maintain .

A positive balance of payment means more Export and Less Import which shows that a country is self sufficient and Self Reliant and a sign of strong Economy.With this a Country will have more inflow of foreign currency and less outflow which signifies it as strong

The High tariffs are also levied to safegauard local manufacturing and small scale businesses which can get easily impacted as the imported product might be cheaper than the local. This will ensure employment and job security to the people of the country

Further example. Those companies that are Outsourcing the jobs to locations with cheaper availability of Labour like Indonesia or Phillipines had to pay a higher tax however those who were creating the jobs were being given tax incentives