Globalization in Your Life
Tariffs on steel and aluminum are proposed to be set at 25% for steel and 10% for aluminum.
Watch the video Tariffs and Protectionism to prepare for this week’s discussion.
Reply to these questions in your post:
- Who do you think will ultimately pay these tariffs? Explain your answer.
- Describe a good or service you use that has been impacted by trade or globalization. What are some advantages and/or disadvantages you have experienced?
Answer preview
Globalization has created the need for countries to protect their local producers. The protection has been achieved through concepts like the imposition of tariffs and protectionism. The video argues that duties increase the world price (Marginal Revolution University, Feb 25, 2015). As such, consumers of the products indirectly pay for the taxes imposed on the producers of the products. If there were no tariffs, the amount of purchase would be lower, but the inclusion of tariffs tends to increase the amount of purchase which is the original amount plus the duty imposed. On the face of it, it looks like the producers pay for the tariffs as before good reach the consumer; the producer is…
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