Research paper: Tariffs and quotas

INT-650-G4152 Int'l Trade & Competitiveness

Zakaria ZRIG

Liu Yang
Southern New Hampshire University
7/29/2015

Every country tries its best to keep its domestic market safe from foreign products. Many times,
a country finds it difficult to face this kind of threats when the exporter is a solid company since it
matches all the countrys criteria. There are many methods to help but the most common are tariffs and
quotas

Tariffs and quotas are always verdicts which have been taken by government on a proposal
order. The latter find it more cost effective to protect local production, and also a fair balance for
foreign producers who represent abroad revenue for the economy of US.
Governments in general support this trade policy tool for tremendous reasons, principally
aspects of economic development of the concerned country, which contains several factors that
contribute to its growth including agriculture, water and economic safety in particular.
Nevertheless, the imposed tariffs and quotas have also numerous downsides. Statistics shows
that there is always a remarkable increase every time the government executes an additional rate of
tariffs and quotas. The prices of the concerned products reasonably upsurge in parallel, which have
negative impact on the U.S. welfare. In 2002, for example, the United States expected to minimize the
amount of the imported steel in order to protect its local production, whereas the first year had known a
slight rise and small revenue, but there was a dramatic decrease in 2004-2005. The principal reason is
that price of steel rose in the market that had automatically. Those effects can be similar to other
products and hurt the welfare of the United States.
With all these tools, preventing your domestic market is not an easy task as it appears.
Exporters will always find a way to get to your market and sell their products.