How Useful Are Tariffs?

In an increasingly globalized market, some governments are becoming much more concerned with three of the main consequences of expanding international trade. The first is that domestic companies are forced to grapple with not only domestic competitors, but also foreign competitors. Second is the growing dependence on foreign firms for important goods. Finally, the existence of trade deficits (higher imports than exports) which are often seen as “unfair”. In order to address these concerns, a growing number of countries are implementing tariffs on their imports, taxing certain classes of goods originating from specified countries.