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Tariff's and quota's for U.S. steel

How does a tariff imposed by the U.S. government on foreign-made steel impact the
domestic price of U.S.-made steel?

Who gains and who loses from a tariff?

How will a quota imposed by the U.S. government on foreign-made machinery impact
the domestic price of the same kind of machinery made by U.S. companies?

Who gains and who loses from a quota?

"We need all kinds of trade restrictions against foreign competition to protect American
jobs!" Explain why this argument is seriously flawed.

Solution Preview

How a tariff imposed by the U.S. government on foreign-made steel impact the
domestic price of U.S.-made steel?

Tariffs are any taxes that the government assesses on goods as they enter leave a country. A tariff may be imposed to protect domestic industries from imported goods and/or to generate government revenue. The tariff imposed by U.S government on foreign steel is a protective tariff and it is intended to artificially inflate prices of imports and protect domestic industries from foreign competition. Finally the domestic price of steel will also increase but it will not exceed the price of foreign competitors and they will make the sale.

Who gains and who loses from a tariff?

As we mentioned before, ...

Solution Summary

The solution discusses the benefits and consequences of tariffs and quotas for foreign-made steel.

$2.19