why are tariff impost (can i pls get this ans in 3 samall points pls)
The following are the three main reasons for imposing tariffs.
1. Discouraging imports- Imposing tariffs on imports raises their price, thereby, making them expensive in comparison to the domestically produced goods. This discourages imports, thereby, saves the scarce foreign exchange.
2. Protection to domestic firms- Since imposition of tariffs makes the imports expensive. This intact the domestic demand to be catered by the domestic firms, as they need not to fear any competition from the foreign counterparts. This also enables them a safe ground to survive and grow further.
3. Curbing unwanted imports- If government wants to curb the demand for any socially unwanted goods, say, liquor, cigarettes, guns, etc. then it imposes tariffs on the imports of such goods. This further makes these goods expensive, thereby, attempts to discourage the consumption of such goods.
1. Discouraging imports- Imposing tariffs on imports raises their price, thereby, making them expensive in comparison to the domestically produced goods. This discourages imports, thereby, saves the scarce foreign exchange.
2. Protection to domestic firms- Since imposition of tariffs makes the imports expensive. This intact the domestic demand to be catered by the domestic firms, as they need not to fear any competition from the foreign counterparts. This also enables them a safe ground to survive and grow further.
3. Curbing unwanted imports- If government wants to curb the demand for any socially unwanted goods, say, liquor, cigarettes, guns, etc. then it imposes tariffs on the imports of such goods. This further makes these goods expensive, thereby, attempts to discourage the consumption of such goods.