Should The U.S. Government Impose Heavy Tariffs On Foreign Goods Coming Into This Country? (Essay Sample)

In Order To Protect American Industry, Should The U.S. Government Impose Heavy Tariffs On Foreign Goods Coming Into This Country?
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Tariffs are taxes that are imposed by a nation on the imports and exports (Bremmer, 2009). The United States imposes tariffs on imports but not on the exports. Taxes play a very critical role in raising the government revenue. Taxes are also imposed to protect domestic industries. Most companies will increase the prices of their products as compensation for the imposed tariff. If the cost of the product is higher than that of a similar domestic product, then consumers are encouraged to go for the domestic product. If the tariffs hike significantly, they can affect importation and the revenue enhance the effect of the tax is likely to be impaired (Dixit, 1984).
Therefore, the U.S. government should not impose heavy tariffs on imported good (Grossman and Helpman, 1997). Tariffs do not have to be high to benefit a country. Very high taxes can promote domestic production and provide more employment opportunities for the local workers. Local producers are not only encouraged to produce but also export more products. But this is not the case. Imposing high tariff on good imported from a particular country instigates a similar reaction. The importing company is also likely to impose high tariffs on U.S. The act of reciprocation from the importing country is likely to limit trade, and the development of the country will be affected (Bremmer, 2009).
Grossman and Krueger (1991) suggest that the high tariffs cause the end user to incur high costs if they prefer the product that is protected by the high tariff. The huge price compensations are as the result of the additional job. Therefore, a nation like U. S. that produces surplus needs to have manageable taxes. The surplus calls forth for a larger market. But if they impose high tariffs, they will also experience high taxes from the country to which they are expor...