question_answer 7)

Why are tariffs imposed?

Answer:

Tariffs are taxes imposed on the imports by a country far providing protection to its domestic industries. Imposition of tariffs increases the price of imported goods such as customs duty are indirect taxes the burden of which is shifted to consumers in the form of higher price. The rise in price discourages consumption of imported goods by consumers and thus domestic industries get a level playing field to compete with imports from other-countries. Tariffs may be lowered after the domestic industry has gained enough strength to face foreign competition. Tariffs may also be imposed on those imported goods which are socially undesirable.