Question

The President is currently considering large increases to the American stance on free trade and imposing (or raising) many tariffs. Is this good of bad for the economy?

Answer 1

Tariffs are border taxes charged on the imports of goods from foreign countries. When a government imposes a tariff on a specific product, importers is required to pay the levy as a percentage of the total value of the good to the customs agency of that nation, at the entry point. Its main purpose is to raise the price of foreign goods to make domestic produce cheaper in comparison, thus helping in protection of local firms from international competition.

I am not in favor of imposing (or raising) many tariffs because in my opinion these are not good for the economy. These tariff results with retaliation. China hit back by imposing tariffs and consequently fears grow over harm to international economy. Canada also imposed tit-for-tat tariffs by imposing tariffs on more than 100 products from US. Similarly Beijing and Mexico also hit back on tariffs. This global trade war could hurt consumers around the globe by making it harder for all firms to operate, and as a result pushing higher prices onto the customers. Thus would lead to adverse effects for consumers.