Critique The Concept Behind Tariff Business & Marketing Essay (Essay Sample)

A CRITIQUE ON THE CONCEPT BEHIND TARIFFS
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Institution
Tariff refers to what countries promise to be imposed on the goods and services imported from the member country of the world trade organization unless the country is part of preferential trade agreements such as free trade zones or customs union (Worldbank.org, n.d.). Tariffs are used to restrict imports by increasing the price of goods and services coming from another country. This makes them less attractive to domestic consumers. Tariffs are political tools that have been used to control the number of imports that flows into a country and to determine which nations will be granted the most favorable trading conditions. High restrictive tariffs create protectionism, shielding a domestic industry's goods and services against foreign competitions through promoting them to consumers. This reduces the importation of a given product which leads to high prices of that product to consumers. Tariffs are imposed in order to protect newly founded domestic industries from the foreign competition on the local market, protect aging and inefficient domestic companies or businesses from foreign competition, to protect domestic producers from “dumping” by foreign companies or governments and finally to raise revenue to the government ( Tirschwell, Peter,2003).