Question

21. What is import tariff? What is the impact of proposed US tariff of steel and aluminum proposed by the US for these industries, various other industries that use these as inputs, to US consumers and overall employment?

22. How can a country attain higher economic growth? What are the potential channels of globalization that affect economic growth?

23. What are the pros and cons of globalization? How can a country prepare for it? What needs Canada to do to benefit from the globalization?

24. What has been the impact of developing countries in globalization? How has globalization affected the poverty and income inequality?

Answer 1

21. Import tariff refers to the tariff imposed on goods and services bought from abroad in order to restrict import and earn higher revenue for the government.  

The proposed import tariff on steel and aluminum will increase the price of steel and aluminum and reduce the amount of import of these goods in the US market. As a result, the domestic producers of steel and aluminum in the USA will be benefitted as they will face less competition, will be able to sell more steel and aluminum and that too at a higher price. Therefore, these the domestic producers of steel and aluminium in the USA will be benefitted. Also, they will increase output and hire more workers which will create more employment in these industries.

However, different industries which use steel and aluminum as a raw material will face a higher cost of production and lower competitiveness due to rising costs. Therefore, these firms would be worse off. In addition, the US consumers will be worse off as they will face a higher price for steel aluminum and other products which use steel and aluminum as raw materials.